Financial Project Assignment Example | Topics and Well Written Essays - 500 words

Financial Project - Assignment Example The extra amount of $ 121,000 was to be taken in form of a loan for repayment in monthly installments. In the event that the loan is to be repaid for 20 years a total of $ 849.52 per month is to be remitted. If the loan is to be repaid in 25 years, a total of $761.22 in form of principal and interest is to be remitted. This means an addition of $ 88.3 would be needed for this increment to result in the repayment being reduced to 20 years. The increment of $ 88.3 means that this figure will be deducted from the extra amount in the pay slip. This will not be on advisable thing to do in the event that one meets his/her monthly expresses with less than $100 left over. A good organization in one`s financial aspects require some money left to cater for emergencies (Roberts and Ralph 2009). This would mean a surplus of $ 11.7 will be what one would be left with. This will not be good especially within a family setting. It is possible for the loan to be repaid in 20 years. The current balance is $ 112,242.47. Refinancing means that one has decided to pay off the accrued loan balance which includes both the principle and interest (Roberts and Ralph 2009). Paying off this loan in 20 years would mean a change in the interest rate or monthly installments. At an interest rate of 5.75%, the total interest to be paid at the end of 20 years would be $ 82,885.05. This means the total amount to be refinanced at the end of 20 years would be 203,885.05. At an interest rate of 4.05%, the total amount in interest to be repaid amounts to $ 55,742.73. Refinancing would require an upfront payment of $ 2,000; this figure would be added on both of these final amounts. This translates to $ 205,888.05 for 5.75% interest rate and $ 178,742.73 for 4.05%. Credit rating is assumed to be the credit worthiness of an individual (Roberts and Ralph 2009). There are specific agencies that are charged with the mandate to judge whether an