Refinancing option to become economically attractive

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You purchase a house for $200,000 by putting 10% down and taking a 15-year loan for the balance. The APR (annual percentage rate) of the loan is 6%. After 5 years, you can refinance your loan at 4.8% for a fee of $2,000. To the nearest tenth of a year, how many more years must you live in the house for this refinancing option to become economically attractive? Your MARR is 10%. (NOTE: You do not have to consider any tax implications for this problem, but do recall that in reality, the interest you pay on a mortgage is tax deductible.)

Number of years _____________

Reference no: EM13834779

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