Solve the problem. Use the given table to find monthly payments. Harold took out

Question

Solve the problem. Use the given table to find monthly payments. Harold took out a 4-year amortized loan for $22,000 at 10% to pay his tuition at a technical institute. After 1 year, he refinanced the unpaid balance of $17,291 at a 6% interest rate. (All interest rates are annual interest rates.) Type the number with no comma or dollar sign. For example, type: 25634.80 1) Find the monthly payment on the original loan: 2) Find the monthly payment on the new loan: 3) How much will Harold save per month is he accepts the new refinanced loan? 4) Find the total amount saved on interest by refinancing the remaining balance of the loan:

Explanation / Answer

Interest on Previous Loan=

[Monthly payment for 36 months- principal]- [New Monthly payment for 36 months- Principal Paid]

=[558 x 36] –[17,291]- [$526 x 36]-$17,291

=[$20,085.12-17,291]-[18,935.84-17,291]

=$2,794.01-$1,644.73

=$1,149

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