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Ann got a 30 year Fully Amortizing FRM for $1,000,000 at an annual interest rate of...

Ann got a 30 year Fully Amortizing FRM for $1,000,000 at an annual interest rate of 5.5% compounded monthly, with monthly payments.

After 5 years of payments, Ann can refinance the balance into a 25 year Fully Amortizing FRM at an annual interest rate of 4.75% compounded monthly, with monthly payments.

Refinancing will cost Ann 1 point and $1,500 in closing costs.

If Ann refinances into this loan and makes payments for 25 years, what will be her annualized IRR from refinancing?

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