Question

If a current mortgage payment of $792 per month can be reduced to $578 per month by refinancing, how many months would you need to remain in the house to recoup refinancing charges of $3,784? (Round up to the nearest month.)

Answer 1

Answer:

$Months =\frac{3784}{214 /month}=17.682months\approx 18 months$

As we can see after cancel the units we got 17.682 months that can be rounded up to approximately 18 months

Step-by-step explanation:

Notation

$P_f =792$ current mortgage payment

$P_i = 578$ reduced mortgage payment

R= 3784 represent the rfinancing charges

Solution to the problem

In order to solve this question we need to find first the difference between the two mortgage payments like this:

$P_f- P_i = 792-578=214$

And then since the refinancing charges is $3784 we can find the number of months that we will need to remain in the house like this:

$Months =\frac{3784}{214 /month}=17.682months$

As we can see after cancel the units we got 17.682 months that can be rounded up to approximately 18 months