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Unformatted text preview: a. Why is this rate the market rate? Because no points are given or required to obtain it. ii) Calculate the payment if the rate was 4.250%? 4.25%? N = 30 * 12; PV = -$200,000; I = 4.375% solve for pmt = ? ; = $983.88 iii) Determine the monthly saving at the lower rate. Calculate cost to obtain a 4.250% loan? 998.57 - $983.88 = $14.69 iv) If you make the payment at the market rate for 5 years, what would be the remaining balance on your mortgage @ 4.25%, set no = 25*12 and solve for PV = ? = $181,615.39...
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- Winter '10