A Florida investor is analyzing a refinance scenario. The current loan balance is $312,000 at 7.5% interest. The new loan would be $315,000 at 6.25% interest with $4,800 in closing costs. What is the monthly interest savings on the new loan?
Correct Answer
D) $293.75
Correct: Current monthly interest: ($312,000 × 7.5%) ÷ 12 = $1,950. New monthly interest: ($315,000 × 6.25%) ÷ 12 = $1,656.25. Monthly savings: $1,950 - $1,656.25 = $293.75. Option A ($325) uses incorrect calculations. Option B ($312.50) miscalculates the interest rates. Option D ($281.25) uses wrong loan amounts.
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