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Compute your new monthly payments for the outstanding loan

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Reference no: EM133168236

Question - Let's say that exactly ten years ago, you took out a $200,000, 30-year mortgage with an annual interest rate of 9 per cent and monthly payments of $1,609.25. But since you took out that loan, interest rates have dropped. You now have opportunity to refinance your loan at an annual rate of 7 per cent over 20 years.

Required -

i) You would need to know what the outstanding balance on your current loan is so you can take out a lower-interest-rate loan and pay it off. If you just made the 120th payment and have 240 payments remaining, calculate your current loan balance?

ii) Compute your new monthly payments for the outstanding loan calculated in part (i) over the next 20 years at an annual rate of 7 per cent.

Reference no: EM133168236

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