Answer:
The right solution is "$178.86".
Explanation:
The given values are:
Interest rate,
= 10%
New nominal interest rate,
= 8%
Years,
= 24
As per the question,
On the original loan, the annul installments will be:
= [tex]100000\times 0.01\times 1.01^{\frac{300}{1.01^{300-1}}}[/tex]
= [tex]1053.22[/tex] ($)
As we know,
The remaining 156 instalments are charged throughout the PV after the 144th deposit,
= [tex]1053.22\times \frac{(1.01^{156-1})}{(0.01\times 1.01^{156}})[/tex]
= [tex]83,017.90[/tex] ($)
On the refinanced loan, the annul installments will be:
= [tex]83017.90\times 0.01\times \frac{1.01^{300}}{(1.01^{300-1})}[/tex]
= [tex]874.36[/tex] ($)
hence,
After refinancing, the difference in mortgage will be:
= [tex]Annual \ installment \ on \ original \ loan-Annual \ installment \ on \ refinanced \ loan[/tex]
= [tex]1053.22-874.36[/tex]
= [tex]178.86[/tex] ($)
