If a person has an option to assume a loan and therefore create a $325 mortgage...

If a person has an option to assume a loan and therefore create a $325 mortgage payment savings with the following known factors, 20 years left on the loan (240 months), original loan rate is 3% and the current market rate is 4.5%. What is the Present Value of the payment savings?

$56,285

$57,687

$51,371

$58,601

Expert Solution

What is the Present Value of the payment savings?
=325/(4.5%/12)*(1-1/(1+4.5%/12)^240)
=51371.2670

jeff jeffy answered 2 years ago

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