(Answered) Your student loan had an original amount of 80000 an

Finance

Your student loan had an original amount of $80,000, an original maturity of 120 months and a contractual rate of 8.2%. The current risk-free rate in the economy is 1.4%. You have made all the payments for the first two years and the institution holding the loan contract makes you the following offer: since you have made all payments on time, the interest rate in your contract will reprice to 4% for the remaining eight years. The offer would cost you an $800 fee. Calculate the NPV of accepting the offer.

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