Horst Brandt recently bought a new home and borrowed $140,000 at 6.25 percent interest for 30 years.
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Horst Brandt recently bought a new home and borrowed $140,000 at 6.25 percent interest for 30 years. His monthly payment for interest and principal will be $862. A friend suggested that Horst should have easily been able to fi nd a loan at 6.0 percent with a monthly payment of $839. Horst dismissed his friend’s comments, arguing that the diff erence in the monthly payments was no big deal. His friend replied, “Horst, it’s not the monthly payment, it’s the interest.”
How much more in interest will Horst pay over the life of the loan because he took a loan with the higher rate?
A. $350 C. $8280 B. $4200 D. $10,500
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