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Bob & Kate are purchasing a new home. The house theyve selected has a price of $350,000. The mortgage interest rate is currently 5% (regardless

Bob & Kate are purchasing a new home. The house theyve selected has a price of $350,000. The mortgage interest rate is currently 5% (regardless of the option they pick below).

They are considering several options:

  • For maturity, they are considering both 15 year and 30 year amortizations.
  • For down payments they are considering either 10% or 20%.

  1. Calculate the amount of their monthly mortgage payment under each of the alternatives.

Downpayment

Amortization Period (years)

10%

20%

15

30

  1. Calculate the Total interest payments under each of the 4 alternatives:

Downpayment

Amortization Period (years)

10%

20%

15

30

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