Financial Project

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Submitted By lovinglife1970
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Currently you’ve meet your monthly expenses with nothing left over in order to pay the loan off in 20 years its best if you don’t refinance to reduce the cost per month. The method I used is to calculate the monthly payment if you start with the present loan balance, interest rate equals the number of payments. Then compare it with your recent payment; the difference will let you know if you can afford or it not. In order to refinance your loan, you’ll start it all over again then compare the results. The recommended course of action are as follows paying the current loan balance at the interest rate over 20 years there would be a difference left over. And it’s less reasonable to refinance if you’re paying more per month to reduce the cost. Paying for 25 years and if you choose to refinance the loan the more money you will have to pay each month. So the best option in this case is to go ahead and pay the loan within 20 years without financing. Paying additional to go ahead and pay the loan off quicker. The formula used was C = (P(r/12) / (1-(1+[r/12])^(-m). To avoid any incorrect calculations I referred to my financial calculator and performed a few steps and came up with the current loan balanced of 125,911.86 at 5.6% over 20 years, the payment would be 887.13 leaving a difference of 106.38. It would be unreasonable to refinance and pay an extra 106.38 per month to reduce the cost per month. Making payments of 780.75 for 25 years, if loan was refinanced at 2,000.00 then the monthly payments per month would be 524.63 and 6, 295.59 per…...

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