Need Help With This Another set of clients just refinanced their home for $195,500 at 3 5 for a 30 year fixed rate mortgage Their monthly payments are $877 88 They have an extra $225 that you have two options for Your clients can put the extra $225 per month towards paying off the mortgage early Your clients can invest the $225 in an annuity each month Which is the best option Answer the following questions to help you answer that question Calculate how many months early the mortgage would be paid off if the $225 is applied monthly You may want to use the amortization calculator posted in Blackboard Calculate the total amount of interest paid if extra monthly payments are made Calculate the total amount of interest paid if NO extra monthly payments are made Read this part clearly For the mortgage where no extra monthly payments were made, the $225 is invested in an annuity each month earning 5 125 compounded monthly For the mortgage where extra payments WERE made, once the mortgage is paid off, they invest the $877 88 225 $1102 88 in an annuity each month earning 5 125 compounded monthly Calculate the amount they will have in each account after the 30 years

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Need Help With This! Another set of clients just refinanced their home for $195,500 at 3.5% for a 30-year fixed rate mortgage. Their monthly payments

Need Help With This!

Another set of clients just refinanced their home for $195,500 at 3.5% for a 30-year fixed rate mortgage. Their monthly payments are $877.88. They have an extra $225 that you have two options for.

Your clients can put the extra $225 per month towards paying off the mortgage early.
Your clients can invest the $225 in an annuity each month.

Which is the best option? Answer the following questions to help you answer that question.

Calculate how many months early the mortgage would be paid off if the $225 is applied monthly. [You may want to use the amortization calculator posted in Blackboard.]
Calculate the total amount of interest paid if extra monthly payments are made.
Calculate the total amount of interest paid if NO extra monthly payments are made.
Read this part clearly: For the mortgage where no extra monthly payments were made, the $225 is invested in an annuity each month earning 5.125% compounded monthly. For the mortgage where extra payments WERE made, once the mortgage is paid off, they invest the $877.88 + 225 = $1102.88 in an annuity each month earning 5.125% compounded monthly. Calculate the amount they will have in each account after the 30 years.