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Cassie is hoping to purchase a 3 bedroom/ 3 bathroom house in her area. The house is on the market for $349,900. Her bank has given her three options for a loan:

15-year mortgage at 4.13% APR, with a required 20% down payment

20-year mortgage at 4.75% APR, with a required 10% down payment

30-year mortgage at 4.99% APR, with a required 20% down payment.

Determine Cassie's best option by finding the monthly payment, the total paid during the mortgage and the total interest paid over the loan. 

I have to find the monthly payment or each year 15, 20, abd 30 year mortgage thats the main thing .. instructor is being wishy washy on the formula i sent her 

 Apr 13, 2022
 #1
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M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]           M = mortgage amount = 349000 - % downpayment

                                                                 P = payment per month

                                                                     n = # payments = years * 12

                                                                          i = interest = decimal rate of interest / 12

Plug and chug

 Apr 13, 2022
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its actually 349,900 ... I missed the 9 in 900 earlier which really threw me obviously

 

so do i subtract 34990 by .20 or multiply to get the down payment? 

dfranklin4113  Apr 13, 2022
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I am actually bad at this kind of stuff so anyone... PLEASE CORRECT ME IF I AM WRONG:

 

 

I got $522 for the first option, $226.11 for the second option and $375.24 for the third option.

 

The best option would be the second option.

 

smiley

 Apr 13, 2022
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so the original cost was 349,900 how did you come up with those answers? 

dfranklin4113  Apr 13, 2022

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