Description
Problem:
You have decided to purchase a house for $225,000 nd are evaluating your options for the mortgage.
Assume your down payment will be 20% of the purchase price, payment will be made monthly and the
first payment will be made one month from today.
** you must use formulas to solve
a. what is the mortgage amount?
b. If you select the 30-year mortgage, the interest rate will be 4.5% annually, what is the monthly payment
c. Suppose that the bank is also offering a 15-year mortgage at 4.25% annually, What is the monthly payment?
d. What is the total of all payments for each mortgage?
e. Which mortgage cost you the least over the life of the mortgage?