Mortgage Assignment | Professional Writing
May 26th, 2020
Suppose you get a $200,000, 30-year mortgage for 4% APR and pay 3 points on it. If you refinance 8 years (i.e. pay off the balance that is due in 8 years) what was the true APR that you paid.
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Hint: first find the principal balance you owe in 8 years, then tell your calculator that you will pay that lump sum after eight years of making the payments you’re making, then solve for rate).
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