You are refinancing your current mortgage with an outstandingloan balance of $280,000 today. The new...

You are refinancing your current mortgage with an outstanding loan balance of $280,000 today. The new loan has 3.9% APR interest rate (compounded monthly) and it requires you to make a monthly payment for the next 30 years. What is your monthly payment under this new loan? Please show your excel formula in your answer and explain step-by-step calculation to arrive to your answer.

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Expert Solution

PV = 280,000

rate = 3.9%/12 = 0.00325

n = 30 * 12 = 360

Monthly payment = PMT(rate, nper, pv, [fv], [type])

Monthly payment = PMT(0.00325, 360, 280,000)

Ignore [fv] and [type] as they are optional

Monthly payment = $1,320.670972

jeff jeffy answered 2 years ago

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