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A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage...

A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage from a 30-year mortgage." Calculate the difference in payments on a 30-year mortgage at an interest of 0.75% a month versus a 15-year mortgage with an interest rate of 0.7% a month. Both mortgage are for $100,000 and have monthly payments.

1) What is the monthly payment committed by the 30-year mortgage? And the total payment?

2) What is the monthly payment committed by the 15-year mortgage? And the total payment?

Solutions

Expert Solution

Answer :-

Monthly payment by committed by 30 years = $309.24

Total payment    = $111,326.40

Monthly payment by committed by 15 years = $578.29

Total payment    = $104092.20

Explanation :-

100000 × 0.00064/0.11067

jeff jeffy answered 2 years ago
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