In: Finance
You purchased a house five years ago and borrowed $400,000
.
The loan you used has 300 more monthly payments of $1,686 each,
starting next month, to pay off the loan.
You can take out a new loan for $355,625 at 2.00% APR compounded
monthly , with 300 more payments, starting next month to pay off
this new loan.
If your investments earn 2.75% APR compounded monthly , how much
will you save in present value terms by using the new loan to
pay-off the original loan?
There may be rounding in this case, so pick the closest answer.