Finance
An Iowa borrower refinances a $200,000 mortgage to a lower rate, saving $150/month. The closing costs were $4,500. What is the break-even period?
A24 months
B30 months✓ Correct
C36 months
D48 months
Explanation
Break-even = Closing costs ÷ Monthly savings = $4,500 ÷ $150 = 30 months. Using the values given ($200,000, $150), apply the appropriate formula.. The correct answer is 30 months.. This is a common calculation on the Iowa real estate exam.
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