business math question

Dec 11th, 2014
Anonymous
Category:
Mathematics
Price: $5 USD

Question description

The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $130,000 and was to amortized in 240 equal monthly installments at an interest rate of 11%/year compounded monthly. The new loan they expect to secure is to be amortized over the same period at an interest rate of 8%/year compounded monthly. How much less can they expect to pay over the life of the loan in interest payments by refinancing the loan at this time?

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