Edit View History Bookmarks Tools Window Help Do Homework-Allvandel Adonso https

Question

Edit View History Bookmarks Tools Window Help Do Homework-Allvandel Adonso https:/ Math 1312 Philipson Avande Homework: Homework 6 Score: 0 of 1 pt 4.D.43 Consider 22 of 45(14 completo|v HW Score: 3 closing costs for each option Explain which is the beter option and why the folowing pair of loan options for a $180,000 mortgage. Caloulate the monthly payment and total Choice 1:30-year fixed nie at 35% with asing cots of S2300 and 1 port Coico 2: 30-year fed rate at 325% with closing costs of $200 and 5 ports. What is the monthy payment for choice 1 Do not round until the final answer. Then round to the nearest cent as needed) Enter your answer in the answer box and then click Check Answer

Explanation / Answer

Part A.

Mortgage M = $180000

rate = 3.5% = 0.035

Time = 30 year

Per month payment will be

PMT = M*(r/n)/[1 - (1 + r/n)^-n*t]

PMT = (180000*0.035/12)/[1 - (1 + 0.035/12)^(-12*30)]

PMT = $808.28

Closing costs = $2300 + $180000*0.01 = $4100

B.

Mortgage M = $180000

rate = 3.25% = 0.0325

Time = 30 year

Per month payment will be

PMT = M*(r/n)/[1 - (1 + r/n)^-n*t]

PMT = (180000*0.0325/12)/[1 - (1 + 0.0325/12)^(-12*30)]

PMT = $783.37

Closing costs = $2300 + $180000*0.05 = $11300

You will save per month = 808.28 - 783.37 = $24.91 in case 2.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.