Urban Site Engineering co

Urban Site Engineering co

Urban Site Engineering constructed a small of?ce building for their ?rm 5 years ago. They ?nanced it with a bank loan for $450,000 over 15 years at 6% interest with quarterly payments and compounding.The loan can be repaid at any time without penalty.The loan can be re?nanced through an insurance?rm for 4% over 20 years?still with quarterly com-pounding and payments. The new loan has a 5% loan initiation fee, which will be added to the new loan.( a ) What is the balance due on the original mortgage (20 payments have been made in last 5 years)?( b ) How much will Urban Site?s payments drop with the new loan?( c ) How much longer will the proposed loan run?

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