Question 1. Points: 1 out of 1 possible.

Suppose that 10 years ago you bought a home for $140,000, paying 10% as a down payment, and
financing the rest at 7% interest for 30 years.

Your existing mortgage (the one you got 10 years ago)

How much money did you pay as your down payment?

$ 14000

Question 2. Points: 1 out of 1 possible.

How much money was your existing mortgage (loan) for?

$ 126,000

Question 3. Points: 3 out of 3 possible.

What is your current monthly payment on your existing mortgage?

$ 838.28

Note: Carry at least 4 decimal places during calculations, but round your final answer to the
nearest cent.

Question 4. Points: 2 out of 2 possible.

How much total interest will you pay over the life of the existing loan?

$ 175780.8

Question 5. Points: 1 out of 1 possible.

This year (10 years after you first took out the loan), you check your loan balance. Only part of
your payments have been going to pay down the loan; the rest has been going towards interest.
You see that you still have $108,123 left to pay on your loan. Your house is now valued at
$190,000.

Your current situation

How much of the original loan have you paid off? (i.e, how much have you reduced the loan
balance by? Keep in mind that interest is charged each month - it's not part of the loan balance.)
$ 17877

Question 6. Points: 1 out of 1 possible.

How much money have you paid to the loan company so far (over the last 10 years)?

$ 100593.6

Question 7. Points: 0 out of 1 possible.

How much interest have you paid so far (over the last 10 years)?

$ 82716.6

Question 8. Points: 1 out of 1 possible.

How much equity do you have in your home (equity is value minus remaining debt)

$ 81877

Question 9. Points: 3 out of 3 possible.

Refinancing

Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate.

If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your
new monthly payments be?

$ 648.25

Question 10. Points: 2 out of 2 possible.

How much interest will you pay over the life of the new loan?

$ 125247

Question 11. Points: 1 out of 1 possible.

Analyzing the refinance

Notice that if you refinance, you are going to be making payments on your home for another 30
years. In addition to the 10 years you've already been paying, that's 40 years total.

How much will you save each month because of the lower monthly payment?
$190.03

Question 12. Points: 1 out of 1 possible.

How much total interest will you be paying (consider the interest you paid over the first 10 years
of your original loan as well as interest on your refinanced loan)

$207963.6

Question 13 Points: 2 out of 2 possible. 2 available on this attempt.. This is attempt 2 of 3.

Now the non-computational question: Does it make sense to refinance? (there isn't a
correct answer to this question. Just give your opinion and your reason)

I personally wouldn't refinance because I would end up paying more money over a longer
period of time. The interest would be higher and I would be paying the house off for 40
years instead of 30. If my finances allow I would just keep the current loan.