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# You have been shopping for a new home You have a choice of financing

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You have been shopping for a new home. You have a
choice of financing. You can choose either a \$200,000
mortgage at 4.75 percent for 30 years, or a \$200,000
mortgage at 3.5 percent for 15 years. Calculate the
monthly payment for both mortgages.
Solution
a.) Calculation of monthly payment
Ist mortgage = \$200000/15.8204
= 12642
Monthly payment = 12642/12 = 1053
IInd mortgage = \$200000/11.5174
= \$17365
Monthly payment = 17365/12 = 1447
b). Total interest ist option = 12642 x 30 - 200000
= 179260
Total interest IInd option = 17365 x 15 - 200000
= 60475

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You have been shopping for a new home. You have a choice of financing. You can choose either a \$200,000 mortgage at 4.75 percent for 30 years, or a \$200,000 mortgage at 3.5 percent for 15 years. Calculate the monthly payment for both mortgages. Solution a.) Calculation of monthly payment Ist mortg ...
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