You are making a decision between a 15 year or 30 year home loan.

Cost of Loan: 300,000

Interest rate for 15 year home loan: 3.5%

Interest rate for 30 year home loan: 4.0%.

If you select the 15 year home loan, you will invest in an investment that will yield a 7% return from years 15-30 for the total amount of your 15 year monthly payment.

If you select the 30 year home loan you will invest in an investment that will yield a 7% return from years 1-15 for the difference in monthly payments(30year-15 year payment)

1) Determine what mortgage will give you the most return on your investment in year 30.