Suppose that you borrow $90,000 at 11% interest for 25 years. Use Appendix D for an approximate answer, but calculate your final answer using the formula method.
a. How much will your annual payments be?
b. How much interest will you pay over the life of the loan?
c. How much should you be willing to pay to get out of an 11% loan and into a 9% loan with 25 years remaining? Assume current interest rates are 9%. Disregard taxes.