Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:6. You plan to buy a house that sells for $250,000. You plan to put 10% down and finance
the rest. You are exploring the following financing options:
i. 30-yr mortgage with a stated annual interest of 6.5%
ii. 15-yr mortgage with a stated annual interest of 6%.
You plan to pay off the loan by making equal monthly payments.
What would be your monthly payment if you take the 30-yr mortgage? How much
(total) interest would you pay over the life of the loan? $1422.15, $286,974
b. What would be your monthly payment if you take the 15-yr mortgage? How much
(total) interest would you pay over the life of the loan? $1898.68, $116,762.01
a.
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