APR P X PMT (1 APR) my For both cases, we have P $100,000 and monthly payments f

Question

APR P X PMT (1 APR) my For both cases, we have P $100,000 and monthly payments for which n 12: the table below shows the calculations for the two different interest rates and loan terms. Y 15 years, APR 0.045 Y 30 years, APR 0.05 1. Use the loan payment formula to find $100,000 x 0.05 $100,000 x 0.045 12 the monthly payment: 12 PMT PMT 0.05 (-12x30) 0.045 12x13) 1 1 12 12 $536.82 $764.99 2. Multiply the monthly payment by the 12 mo x loan term in months to find the total 30 yr x $536.82 15 yr x $193,255 12 mo $764.99 x $137,698 yr mmo mo payments:

Explanation / Answer

Given is a data of monthly payments and total payment for two different times and interest rates to the same principal.

a) First one has monthly payment of $536.82

Second one has monthly payment of $764.99

So, second one has higher monthly payments.

b) First one has total payment of $193,255

Second one has total payment of $137,698

So, first one pays more money to the bank.

c) a and b are clear enough to unaderstand that if the time is less, monthly payment is more and total payment is

less and  if the time is more,monthly payment is less and total payment is more.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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