Anna Simpson

Mathematics

16 April, 05:29

Carol has had a $145,000 fixed-rate mortgage for 5 years at 6.25% and is

considering refinancing. She can now get an 80/20 mortgage with 4.5% and

9.5% interest, respectively. Based only on this information, should she

refinance?

A. No; she has too much equity built up in the house.

B. No; the two blended interest rates are the same.

C. No; the new blended interest rate is higher than the old interest

rate.

D. Yes; the new blended interest rate is lower than the old blended

interest rate.