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A borrower takes a cash-out to refinance for 80% of the existing property value. The property...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property is currently valued at $250,000, and the outstanding amount of the existing mortgage is $60,000. The new loan will be a hybrid 5/1 ARM with an initial interest rate of 2.625% and a 30-year term. What is the total amount in $dollars that the borrower will pay in interest during the first five years of the loan? Round to two decimals.

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Expert Solution

=PMT(2.625%/12,12*30,-250000*80%)*12*5-(250000*80%-FV(2.625%/12,12*5,PMT(2.625%/12,12*30,-250000*80%),-250000*80%))
=24771.8510

jeff jeffy answered 2 years ago
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