Assume that you are 10 years into a 30 year home loan at 5.3%. You owe $280000 left on your home at this time. You can refinance your loan at 3.1% for 20
years; however the closing costs will be around $3500.
a. If you go for refinancing how many more months would you need to live in the home in order to get the closing cost back? Ignore time value of money and tax
credits of the interest payments_______________
b. Answer part (a) again considering time value of money and MARR 10% compounded monthly. Ignore tax credits of interest again _______________