LaMar and Louise Hubbs moved from Alabama to the heart of Texas. They were delig

Question

LaMar and Louise Hubbs moved from Alabama to the heart of Texas. They were delighted to find a Southern-style house for sale and proceeded with plans to buy it. They needed to borrow $150,000 and decided to obtain a 20-year loan at a 9.2% interest rate. However, the monthly payments were higher than they could afford, so they decided on a 30-year loan to obtain lower monthly payments. (Round your final answers to two decimal places.)

(a) Find the monthly payments for the 20-year and the 30-year loans. 20-year loan $ 30-year loan $

(b) Find the total amount paid over the life of each loan. 20-year loan $ 30-year loan $

(c) Find the savings per month by going to the 30-year loan. $

(d) Find the increased total cost by going to the 30-year loan. $

Explanation / Answer

A) the monthly payments for 20Year loan is $1369 and for 30year loan is $1229

B) the amount paid over life of each loan is for 20 years is 1369*240 =$328560and for 30 years is $442440

C) Savings per month by going to 30 yr loan is (1369-1229) =$140

D)The increased total cost by going to the 30-year loan is (442440-328560) =$113880

Loan Amount 150000 Loan Term (Years) 20 Payments Per Year 12 Rate of Interest 9.20% Monthly Installment 1369 S.No Monthly Installment Interest Principal Balance 0 150000 1 1369 1150 219 149781 2 1369 1148 221 149560 3 1369 1147 222 149338 4 1369 1145 224 149114 5 1369 1143 226 148888 6 1369 1141 227 148661 7 1369 1140 229 148432 8 1369 1138 231 148201 9 1369 1136 233 147968 10 1369 1134 235 147733 11 1369 1133 236 147497 12 1369 1131 238 147259 13 1369 1129 240 147019 14 1369 1127 242 146777 15 1369 1125 244 146534 16 1369 1123 246 146288 17 1369 1122 247 146041 18 1369 1120 249 145791 19 1369 1118 251 145540 20 1369 1116 253 145287 21 1369 1114 255 145032 22 1369 1112 257 144775 23 1369 1110 259 144516 24 1369 1108 261 144255 25 1369 1106 263 143992 26 1369 1104 265 143727 27 1369 1102 267 143460 28 1369 1100 269 143191 29 1369 1098 271 142920 30 1369 1096 273 142646 31 1369 1094 275 142371 32 1369 1092 277 142094 33 1369 1089 280 141814 34 1369 1087 282 141532 35 1369 1085 284 141249 36 1369 1083 286 140963 37 1369 1081 288 140674 38 1369 1079 290 140384 39 1369 1076 293 140091 40 1369 1074 295 139796 41 1369 1072 297 139499 42 1369 1069 299 139200 43 1369 1067 302 138898 44 1369 1065 304 138594 45 1369 1063 306 138287 46 1369 1060 309 137979 47 1369 1058 311 137668 48 1369 1055 313 137354 49 1369 1053 316 137038 50 1369 1051 318 136720 51 1369 1048 321 136399 52 1369 1046 323 136076 53 1369 1043 326 135750 54 1369 1041 328 135422 55 1369 1038 331 135091 56 1369 1036 333 134758 57 1369 1033 336 134422 58 1369 1031 338 134084 59 1369 1028 341 133743 60 1369 1025 344 133399 61 1369 1023 346 133053 62 1369 1020 349 132704 63 1369 1017 352 132353 64 1369 1015 354 131999 65 1369 1012 357 131642 66 1369 1009 360 131282 67 1369 1006 362 130919 68 1369 1004 365 130554 69 1369 1001 368 130186 70 1369 998 371 129815 71 1369 995 374 129442 72 1369 992 377 129065 73 1369 989 379 128686 74 1369 987 382 128303 75 1369 984 385 127918 76 1369 981 388 127530 77 1369 978 391 127139 78 1369 975 394 126744 79 1369 972 397 126347 80 1369 969 400 125947 81 1369 966 403 125544 82 1369 963 406 125137 83 1369 959 410 124728 84 1369 956 413 124315 85 1369 953 416 123899 86 1369 950 419 123480 87 1369 947 422 123058 88 1369 943 426 122632 89 1369 940 429 122203 90 1369 937 432 121771 91 1369 934 435 121336 92 1369 930 439 120897 93 1369 927 442 120455 94 1369 923 445 120010 95 1369 920 449 119561 96 1369 917 452 119109 97 1369 913 456 118653 98 1369 910 459 118194 99 1369 906 463 117731 100 1369 903 466 117264 101 1369 899 470 116794 102 1369 895 474 116321 103 1369 892 477 115844 104 1369 888 481 115363 105 1369 884 484 114878 106 1369 881 488 114390 107 1369 877 492 113898 108 1369 873 496 113403 109 1369 869 500 112903 110 1369 866 503 112400 111 1369 862 507 111893 112 1369 858 511 111381 113 1369 854 515 110866 114 1369 850 519 110347 115 1369 846 523 109824 116 1369 842 527 109298 117 1369 838 531 108767 118 1369 834 535 108231 119 1369 830 539 107692 120 1369 826 543 107149 121 1369 821 547 106602 122 1369 817 552 106050 123 1369 813 556 105494 124 1369 809 560 104934 125 1369 804 564 104369 126 1369 800 569 103801 127 1369 796 573 103227 128 1369 791 578 102650 129 1369 787 582 102068 130 1369 783 586 101482 131 1369 778 591 100891 132 1369 773 595 100295 133 1369 769 600 99695 134 1369 764 605 99091 135 1369 760 609 98481 136 1369 755 614 97867 137 1369 750 619 97249 138 1369 746 623 96625 139 1369 741 628 95997 140 1369 736 633 95364 141 1369 731 638 94726 142 1369 726 643 94084 143 1369 721 648 93436 144 1369 716 653 92784 145 1369 711 658 92126 146 1369 706 663 91463 147 1369 701 668 90796 148 1369 696 673 90123 149 1369 691 678 89445 150 1369 686 683 88761 151 1369 681 688 88073 152 1369 675 694 87379 153 1369 670 699 86680 154 1369 665 704 85976 155 1369 659 710 85266 156 1369 654 715 84551 157 1369 648 721 83830 158 1369 643 726 83104 159 1369 637 732 82372 160 1369 632 737 81635 161 1369 626 743 80892 162 1369 620 749 80143 163 1369 614 755 79388 164 1369 609 760 78628 165 1369 603 766 77862 166 1369 597 772 77090 167 1369 591 778 76312 168 1369 585 784 75528 169 1369 579 790 74738 170 1369 573 796 73942 171 1369 567 802 73140 172 1369 561 808 72332 173 1369 555 814 71518 174 1369 548 821 70697 175 1369 542 827 69870 176 1369 536 833 69037 177 1369 529 840 68197 178 1369 523 846 67351 179 1369 516 853 66498 180 1369 510 859 65639 181 1369 503 866 64774 182 1369 497 872 63901 183 1369 490 879 63022 184 1369 483 886 62136 185 1369 476 893 61244 186 1369 470 899 60344 187 1369 463 906 59438 188 1369 456 913 58525 189 1369 449 920 57605 190 1369 442 927 56677 191 1369 435 934 55743 192 1369 427 942 54801 193 1369 420 949 53853 194 1369 413 956 52896 195 1369 406 963 51933 196 1369 398 971 50962 197 1369 391 978 49984 198 1369 383 986 48998 199 1369 376 993 48005 200 1369 368 1001 47004 201 1369 360 1009 45996 202 1369 353 1016 44979 203 1369 345 1024 43955 204 1369 337 1032 42923 205 1369 329 1040 41883 206 1369 321 1048 40835 207 1369 313 1056 39780 208 1369 305 1064 38716 209 1369 297 1072 37643 210 1369 289 1080 36563 211 1369 280 1089 35474 212 1369 272 1097 34378 213 1369 264 1105 33272 214 1369 255 1114 32158 215 1369 247 1122 31036 216 1369 238 1131 29905 217 1369 229 1140 28765 218 1369 221 1148 27617 219 1369 212 1157 26460 220 1369 203 1166 25294 221 1369 194 1175 24118 222 1369 185 1184 22934 223 1369 176 1193 21741 224 1369 167 1202 20539 225 1369 157 1211 19328 226 1369 148 1221 18107 227 1369 139 1230 16877 228 1369 129 1240 15637 229 1369 120 1249 14388 230 1369 110 1259 13129 231 1369 101 1268 11861 232 1369 91 1278 10583 233 1369 81 1288 9295 234 1369 71 1298 7998 235 1369 61 1308 6690 236 1369 51 1318 5372 237 1369 41 1328 4045 238 1369 31 1338 2707 239 1369 21 1348 1359 240 1369 10 1359 0

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