Find the total amount paid for each option

timer Asked: Jun 1st, 2013

Question Description

Need help with my Business question - I’m studying for my class.

Compare the monthly payments and total and total loan cost for the following two mortgages options. Assume that both loans are fixed rate and have the same closing cost. You need to borrow $200,000.

Option 1: a 30 year loan at an APR of 10%

Find the monthly payment for each option:

The monthly payment for option 1 is ?

The monthly payment for option 2 is ?

(round to the nearest dollar)

Find the total amount paid for each option:

The total payment for option 1 is ?

The total payment for option 2 is ?

(use the answers from the previous step to find this answer)

If you have a very tight budget and need to pay as little per month as possiable, which loan is the better choice?

Option 1, beacuse it has a lower monthly payment

Option 2, because it costs less over the entire loan

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