Problem $3$

Choose ONE option

Option A

For the following loan options, compare the monthly payment and total payment.

Discuss the pros and cons of each loan. $($These are real APRs from April $18,2024.)$

You need a $$400,000$ loan for a home mortgage.

Option $1$: a $15-$year loan, APR is $7\mathrm{.}12\%$

Option $2$: a $30-$year loan, APR is $7\mathrm{.}91\%$

Option B

By sneaky design, credit cards are difficult to pay off completely through paying just the minimum payments.

a$)$ How much would the average Utahn need to pay monthly to pay off $$3,000$ of credit card debt in $2$ years? Assume the interest rate on the credit card is $22\%.$

b$)$ Using your answer from part $($a$),$ how much will this person pay in total to clear their debt?

c$)$ Do you have any suggestions for a person in this scenario?