Final answer:
The question requires calculating the total interest savings a homeowner would receive by refinancing their existing 30-year mortgage (with an original balance based on a home worth $168,234) after 10 years to a new 20-year mortgage at a lower interest rate.
Step-by-step explanation:
The question involves a mathematical calculation to determine how much interest a homeowner can save by refinancing their mortgage.
A person purchased a $168,234 home 10 years ago, putting 10% down and securing a 30-year mortgage at an 11.13% interest rate, compounded monthly. They are now looking to refinance the remaining balance of the mortgage by taking out a new 20-year mortgage at a 5.1% interest rate, also compounded monthly. To calculate the interest saved, we would first need to establish the remaining balance on the original mortgage after 10 years of payments, then calculate the total interest paid over the remaining 20 years. Next, compute the total interest paid on the new 20-year mortgage at 5.1%. The difference between these two amounts will give us the savings from refinancing.