document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1200901>Question 1200901</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Five years ago, Diane secured a bank loan of $360,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 30 years, and the interest rate was 6%/year compounded monthly on the unpaid balance. Because the interest rate for a conventional 30-year home mortgage has now dropped to 4.5%/year compounded monthly, Diane is thinking of refinancing her property. (Round your answers to the nearest cent.)<BR>\n" );
document.write( "(a) What is Diane's current monthly mortgage payment?<BR>\n" );
document.write( "(b) What is Diane's current outstanding principal?<BR>\n" );
document.write( "(c) If Diane decides to refinance her property by securing a 30-year home mortgage loan in the amount of the current outstanding principal at the prevailing interest rate of 4.5%/year compounded monthly, what will be her monthly mortgage payment?<BR>\n" );
document.write( "d) How much less will Diane's monthly mortgage payment be if she refinances? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #835128 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=835128\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> your answers are shown below.\r<BR>\n" );
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document.write( "(a) What is Diane's current monthly mortgage payment?<BR>\n" );
document.write( "$2158.38\r<BR>\n" );
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document.write( "(b) What is Diane's current outstanding principal?<BR>\n" );
document.write( "$334,995.68\r<BR>\n" );
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document.write( "(c) If Diane decides to refinance her property by securing a 30-year home mortgage loan in the amount of the current outstanding principal at the prevailing interest rate of 4.5%/year compounded monthly, what will be her monthly mortgage payment?<BR>\n" );
document.write( "$1697.37\r<BR>\n" );
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document.write( "(d) How much less will Diane's monthly mortgage payment be if she refinances?<BR>\n" );
document.write( "$461.01\r<BR>\n" );
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document.write( "i used the texas instruments business analyst 2 to provide these results.<BR>\n" );
document.write( "i also used excel to confirm the results were accurate.<BR>\n" );
document.write( "you can also use an online calculator to provide similar results from the texas instruments calculator.<BR>\n" );
document.write( "here are the results from using the online calculator.\r<BR>\n" );
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document.write( "first was used to establish the payment at 6% per year compounded monthly for 360 months.<BR>\n" );
document.write( "inputs were everything except payment at the end of each month.<BR>\n" );
document.write( "interest rate was 6/12 = .5% per month.<BR>\n" );
document.write( "number of months was 30 years * 12 = 360.\r<BR>\n" );
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document.write( "second was used to establish remaining balance at the end of 5 years.<BR>\n" );
document.write( "payments remained the same.<BR>\n" );
document.write( "number of months remaining on the loan was 300 (360 minus 60).<BR>\n" );
document.write( "payment was the same at the end of each month.<BR>\n" );
document.write( "interest rate was the same per month.<BR>\n" );
document.write( "inputs were everything except present value.\r<BR>\n" );
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document.write( "third was used to establish what the new payment needed to be.<BR>\n" );
document.write( "inter interest rate was 4.5/12 = .375% per month.<BR>\n" );
document.write( "number of months = 360.<BR>\n" );
document.write( "present value was calculated from second output.<BR>\n" );
document.write( "inputs were everything except payment at the end of each month.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2023/031103.jpg\">\r<BR>\n" );
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document.write( "there are very slight differences from the analysis using the business analyst due to intermediate rounding.<BR>\n" );
document.write( "it did not appears to have an effect on the final results.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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