Which it would be beneficial to refinance the mortgage

Assignment Help Financial Management
Reference no: EM131045682

A homeowner took out a 20-year, fixed-rate mortgage of $410,000. The mortgage was taken out 10 years ago at a rate of 5.60 percent. If the homeowner refinances, the charges will be $4,000. What is the highest interest rate at which it would be beneficial to refinance the mortgage? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

APR 

Reference no: EM131045682

Questions Cloud

Using the three different loans over the course of the loan : You are considering the purchase of a $250,000 house using a regular fixed rate mortgage loan with a 20% down payment; what is the monthly payment (not including taxes and insurance) using a 30-year (5.0%), 20-year (4.50%), and a 15-year (4.00%)? How..
The capital stock of the evermore oil company : Adams, by fraudulent representations, induced Barton to purchase one hundred shares of the capital stock of the Evermore Oil Company. The shares were worthless. Barton executed and delivered to Adams a negotiable promissory note for $5,000, dated ..
Direct legal and administrative costs of bankruptcy : Aside from the direct legal and administrative costs of bankruptcy, there are many other indirect costs associated with financial distress (whether or not the firm has formally filed for bankruptcy). Discuss four examples of indirect costs.
Briefly describe the baldrige award : Briefly describe the Baldrige Award. State each category of evaluation and describe Crocs' performance in each category. Recommend a point award for each category based on the company's performance.
Which it would be beneficial to refinance the mortgage : A homeowner took out a 20-year, fixed-rate mortgage of $410,000. The mortgage was taken out 10 years ago at a rate of 5.60 percent. If the homeowner refinances, the charges will be $4,000. What is the highest interest rate at which it would be benefi..
Bunch of fresh flowers that the former baseball player : When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star c..
Essay summary - the iconography of dualism : Write one page summary of given Essays. Essay - THE ICONOGRAPHY OF DUALISM Pre-Columbian Instruments and Sounds as Offerings
Develop a ppt presentation around current government policy : What are the policy options needed to deal with our ageing population - what are the policy options that we can consider to deal with the current rise in obesity rates and the impact on the health of the nation.
How many shares should be outstanding after the IPO : The investors in Generation.com, a company organized to sell fashions to the current generation of teenagers over the Internet, are interested in harvesting their investments. The investment banker is recommending an IPO that would yield gross procee..

Reviews

Write a Review

Financial Management Questions & Answers

  Variable costs and fixed costs at volume

A company has $6.20 per unit in variable costs and $4.90 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.42, what price should be charged if 66,000 units are expected to be sold?

  Statements reflects the doctrine of pre-emption

Which of the following statements reflects the doctrine of pre-emption?

  About the calculate the net present value

The Spartan Technology Company has a proposed contract with the Digital Systems Company of Michigan. The initial investment in land and equipment will be $260,000. Of this amount, $210,000 is subject to five-year MACRS depreciation. Calculate the net..

  Cash flows for bond that has four year maturity

Draw a time line showing the cash flows for a bond that has a four year maturity, semiannual coupon payments, a coupon rate of 5 percent, and a par value of $1,000.

  Compute the value of this stock with a required return

A firm is expected to pay a dividend of $2.45 next year and $2.60 the following year. Financial analysts believe the stock will be at their price target of $95 in two years. Compute the value of this stock with a required return of 12.4 percent.

  What is the initial cash outlay and free cash flow

You are the head of finance department in XYZ Company. You are considering adding a new machine to your production facility. The new machine’s base price is $10,900.00, and it would cost another $1,970.00 to install it. What is the initial cash outla..

  Executive compensation or how much hedge fund managers earn

Should we care about executive compensation or how much hedge fund managers earn? How should incentive compensation be changed? Should it be changed? Who can change it? Southwest Airline's CFO hedged fuel prices and saved the company hundreds of mill..

  Security based on the capital asset pricing model

If there is a security with a negative beta, for example -0.5, what can you say about the expected return of the security based on the Capital Asset Pricing Model (CAPM), or the Security Market Line (SML)? Would it be greater or smaller than the risk..

  Incorporated has a debt ratio

Snort and Smiley incorporated has a debt ratio of .42, noncurrent liabilities of 20,000, total asset of 70,000. What is snort and smiley's level of current liabilities? The answer is 9,400. I need the work to get to this answer.

  Fixed asset will be depreciated straight-line to zero

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.85 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

  Individual retirement account with maximum contribution

Mary plans to fund her individual retirement account (IRA) with the maximum contribution of $2,500 at the end of each year for the next 25 years. If Mary can earn 9 percent on her contributions, how much will she have at the end of the twenty-fifth y..

  What is the expected risk- free rate of return

What is the expected risk- free rate of return if asset X, with a beta of 1.5, has an expected return of 20 percent, and the expected market return is 15 percent? Can please explain step by step how to solve this problem.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd