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You want to purchase a home for $200,000. a. OPTION 1: You must give a down payment of 10%. You can get a loan for
You want to purchase a home for $200,000.
a. OPTION 1: You must give a down payment of 10%. You can get a loan for the remaining 90% at 4.8%interest compounded monthly for 30 years. Use the present value formula to calculate your monthly loan payment?b.
OPTION 2: You must give a down payment of 20%. You can get a loan for the remaining 80% at 4.2% interest compounded monthly for 20 years. Use the present value formula to calculate your monthly loan payment
c. If you could take OPTION 2, how much would you save over OPTION 1?
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