Sample B

Assuming that the actual principal balance of the new mortgage is $35,000.00, compute the increased interest payment as follows:
  1. Lesser remaining balance: $50,000.00
  2. Lesser remaining term: 174 months
  3. $50,000.00 at 7% for 174 months = payment of: $458.22
  4. $458.22 at 10% for 174 months will pay off: $42,010.50
  5. $50,000.00 minus $42,010.50 = $7,989.50
  6. Add origination fee (amount for item 4): $420.11
  7. Add discount points (amount for item 4): $840.21
  8. Prorate factor: $35,000.00: $42,010.50 = 83.31% = 0.8331
  9. ($7,989.50 + $420.11 + $840.21) x 0.8331 = $7,706.03