You have a mortgage balance of $117,000 that will require you to make 120 more payments of $1,200 , starting next month. alternatively, you can take out a loan today for $117,000 with an interest rate of 3% apr compounded monthly and pay off the original mortgage. the new loan will require you to make 120 more payments, starting next month. if your investments earn 2.00% apr, compounded monthly, how much will you save in pv terms by taking out the new loan to pay off the original mortgage?

In PV term, we are saving 7,633.33 dollars

Explanation:

First, we calculate the PTm of the bank loan:

PV  $117,000.00

time   120 months

monthly - rate  0.0025 (0.03 annual rate /12 months)

C  $ 1,129.761

1,200 - 1,129.76 = 70.24

Each month we are saving 70.24 dollars

if this yield 2% we cancalcualte the present value of the savings:

C$70

time120

rate0.001666667 (0.02/12)

PV$7,633.6663

answer: d. characteristics of guests

explanation: it is directly related to the spending characteristics of attendees who fall into each of these categories: