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Discuss how much in raw dollars over the final years

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Suppose a homeowner purchased a home for $100,000, with 100% financing at 5 percent for 10 years. Payments are made yearly at the end of each year. It seems to me that the yearly payments would be $12,950(to the nearest dollar).

After one year, the homeowner will still owe a principal of $90,931 if I did it correctly.

Refinancing the principal at 4% for 9 years will save how much in raw dollars over the final 9 years?

Reference no: EM131809604

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