Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You've decided to buy a house that is valued at $1 million. You have $150,000 to use as a down payment on the house, and
You've decided to buy a house that is valued at $1 million. You have $150,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $850,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be$10,929.01 per month. (Note: Round the final value of any interest rate used to four decimal places.) $10,929.01 $8,743.21 $11,803.33 $13,551.98 Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you wir pay a lot of money on interest. If your bank approves a 15-year, $850,000 loan at a fixed nominal interest rate of 12% (APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be ? (Note: Round the final value of any interest rate used to four decimal places.) It is likely that you won't like the prospect of paying more money each month, but if you do take out a 15-year mortgage, you will make far fewer payments and will pay a lot less in interest. How much more total interest will you pay over the life of the loan if you take out a 30-year mortgage instead of a 15-year mortgage? $1,809,591.52 O $1,678,461.70 O $1,311,298.20 O $1,547,331.88
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started