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# src="/qa/attachment/11094309/" alt="Screen Shot 2020-02-10 at 9.40.16 PM.png" />Please help me to solve it! Attachment 1 Attachment 2 ATTACHMENT PREVIEW Download attachment Screen Shot 2020-02-10 at 9.40.12 PM.png When the Sampsons purchased a home, they obtained a thirty-year mortgage with a fixed interest rate of 6%. Their monthly mortgage payment (excluding property taxes and insurance) is about \$780 per month. The Sampsons still owe about \$130,000 on their existing mortgage. Today, they could obtain a thirty-year \$130,000 mortgage with an interest rate of 5%. Dave and Sharon want to determine how much they can lower their monthly payments by refinancing. If they refinance their home, they would incur transaction fees of \$3,500 after considering any tax effects. The Sam psons take the standard deduction when calculating their personal income taxes, so their interest payments on their mortgage are not tax- deductible. 1. Use a Web site or a ﬁnancial calculator to determine the monthly mortgage payment (excluding property taxes and insurance) on a \$130,000 mortgage if the Sampsons obtain a new thirty-year mortgage at the 5% interest rate. Mortgage loan \$130,000 Interest rate 5% Years 30 Monthly mortgage payment 2. The Sampsons expect that they will not move for at least three years. Advise the Sampsons on whether they should reﬁnance their mortgage by comparing the savings of reﬁnancing with the costs. Current mortgage payment \$780 Mortgage payment at 5% Monthly savings Annual savings Years in house after reﬁnancing 3 Total savings ATTACHMENT PREVIEW Download attachment Screen Shot 2020-02-10 at 9.40.16 PM.png

(1) Monthly mortgage payment = \$697 .87 (2) Current mortgage payment \$780 Mortgage... View the full answer

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