How much less can they expect to pay over the life of loan

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Reference no: EM131974049

Problem

The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $120,000 and is now to be amortized in 240 equal monthly installments at an interest rate of 6%/year compounded monthly. The new loan they expect to secure is to be amortized over the same period at an interest rate of 4.2%/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?

Reference no: EM131974049

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