Ann Is buying a new home for $365,000. She is choosing between 2 loan options. Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment. Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment. Which loan has the lowest total cost? a Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. b Loan B is approximately $87,235 less expensive than Loan A. c Loan B is approximately $52,379 less expensive than Loan A. d Loan A is approximately $102,473 less expensive than Loan B.
Ann Is buying a new home for $365,000. She is choosing between 2 loan options. Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment. Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment. Which loan has the lowest total cost? a Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. b Loan B is approximately $87,235 less expensive than Loan A. c Loan B is approximately $52,379 less expensive than Loan A. d Loan A is approximately $102,473 less expensive than Loan B.
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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Ann Is buying a new home for $365,000. She is choosing between 2 loan options.
- Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment.
- Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment.
Which loan has the lowest total cost?
| a | Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. |
| b | Loan B is approximately $87,235 less expensive than Loan A. |
| c | Loan B is approximately $52,379 less expensive than Loan A. |
| d | Loan A is approximately $102,473 less expensive than Loan B. |
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