compound interest

[sguar450]

A person purchased a $140000.00 home 10 years ago by paying 20% down and signing a 30-year mortgage at 11.7% compounded monthly. Interest rates have dropped and the owner wants to refinance the unpaid balance by signing a new 20-year mortgage at 9.1% compounded monthly. How much interest will refinancing save? Round your answer to the nearest dollar.

 

[Denis]

A person purchased a $140000.00 home 10 years ago by paying 20% down and signing a 30-year mortgage at 11.7% compounded monthly. Interest rates have dropped and the owner wants to refinance the unpaid balance by signing a new 20-year mortgage at 9.1% compounded monthly. How much interest will refinancing save? Round your answer to the nearest dollar.

HINT:
1: calculate monthly payment on original mortgage of $112,000 (140,000 - 20%)
2: using that payment, calculate balance owing 10 years (120 months) later
3: calculate monthly payment on that balance over 20 years (240 months)

240 * original payment - 240 * new payment = interest saved