. Which option is better for your purchase of a $230,000 home with a 18% down payment: A) Interest rate of 9.5% with a 15 year mortgage or B) Interest rate of 5.5% with a 30 year mortgage? *****To answer which is "better" you must address which option has a lower monthly payment, *AND* which option will cost you more interest by the end of the loan. *****

Using the simple interest formula, for *both options above*, calculate the interest (I) you will be paying as a part of your FIRST monthly payment. (**Ask yourself: What is P? r? t? for the first month)

*For both options*: After calculating what your monthly payment would be AND what the interest of your first payment would be, figure out how much of that monthly payment is going to your principal. (**Ask yourself: What is the TOTAL monthly payment? How much of that is interest? So what is left?) Show work