When Gustavo and Serrana bought their home, they had a 5.9% loan with monthly payments of $870.60 for 30 years. After making 78 monthly payments, they plan to refinance for an amount that includes an additional $35,000 to remodel their kitchen. They can refinance at 4.8% compounded monthly for 25 years with refinancing costs of $625 included with the amount refinanced.

(a) Find the amount refinanced. (Round your answer to the nearest cent.)

(b) Find their new monthly payment. (Round your answer to the nearest cent.) $

(c) How long will it take to pay off this new loan if they pay $1200 each month? (Round your answer up to the next whole number.)

Question

Damarion Farmer

Business

19 December, 01:54

When Gustavo and Serrana bought their home, they had a 5.9% loan with monthly payments of $870.60 for 30 years. After making 78 monthly payments, they plan to refinance for an amount that includes an additional $35,000 to remodel their kitchen. They can refinance at 4.8% compounded monthly for 25 years with refinancing costs of $625 included with the amount refinanced.

(a) Find the amount refinanced. (Round your answer to the nearest cent.)

(b) Find their new monthly payment. (Round your answer to the nearest cent.) $

(c) How long will it take to pay off this new loan if they pay $1200 each month? (Round your answer up to the next whole number.)

+5

Answers (1)

Know the Answer?

Genevieve Clark · Answer 1

b

Explanation:

The formula used to calculate the fixed monthly payment (P) required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of r is P = L [r (1 + r) n]/[ (1 + r) n - 1]