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Math Equation

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Subject
Mathematics
School
San Diego State University
Type
Homework
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Running head: MATH EQUATION 1
Math Equation
Student's Name:
Institution Affiliation

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MATH EQUATION 2
Math Equation
a.Option A Home Value = $300, 000
Down Payment = $300,000×20/100
= $60,000
Loan Amount Required= $(300,000-60,000)
P
o
= $240,000
Monthly Payment d = P
o
(r/k) ÷ [1-(1+r/k)
-NK
]
R= 4.4% or 0.044 P
o
= $240,000
N = 15 Years K= 12
Therefore, d= [(240,000 × 0.044/12)] ÷ [1-(1 + 0.044/12)
-15×12
]
=$1823.74
Total interest paid = (180 × 1823.74) - (240,000)
= $88,273.20
b. Option B
Home Value = 300,000
Down Payment = 300,000 × 15/100
= $45,000
Required Loan Amount= $(300,000-45,000)
= $255,000
Monthly Loan Payment= P
o
(r/k) ÷ [1-(1+r/k)
-NK
]
P
o=
255,000 r= 4.4% or 0.044
N= 30 Years K=12
Therefore, Monthly Payment
= [(255,000 × 0.044/12)] ÷ [1-(1+0.044/12)
-30×12
]
= $1276.94
Total Interest Paid= [(360 × 1276.94) (255,000)]
= $204,698.40

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Running head: MATH EQUATION 1 Math Equation Student's Name: Institution Affiliation MATH EQUATION 2 Math Equation a.Option A Home Value = $300, 000 Down Payment = $300,000×20/100 = $60,000 Loan Amount Required= $(300,000-60,000) Po= $240,000 Monthly Payment d = Po (r/k) ÷ [1-(1+r/k)-NK] R= 4.4% or 0.044 Po = $240,000 N = 15 Years K= 12 Therefore, d= [(240,000 × 0.044/12)] ÷ [1-(1 + 0.044/12)-15×12] =$1823.74 Total interest paid = (180 × 1823.74) - (240,000) = $88,273.20 b. Option B Home Value = 300,000 Down Payment = 300,000 × 15/100 = $45,000 Required Loan Amount= $(300,000-45,000) = $255,000 Monthly Loan Payment= Po (r/k) ÷ [1-(1+r/k)-NK] Po= 255,000 r= 4.4% or 0.044 N= 30 Years K=12 Therefore, Monthly Payment = [(255,000 × 0.044/12)] ÷ [1-(1+0.044/12)-30×12] = $1276.94 Total Interest Paid= [(360 × 1276.94) – (255,000)] = $204,698.40 MATH EQUATION 3 The interest rate for Option A is better than that of Option B. Therefore, Monica and Brian should choose the Credit Union Option to purchase their dream home and forgo the other alternative. Credit Union is tax-exempt and allows mutual credit unions to raise capital through retained earnings rather t ...
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