Phil Pittman is interested in a fixed-rate mortgage for $200,000. He isundecided whether to choose a 15- or 30-year mortgage. The currentmortgage rate is 8% for the 15-year mortgage and 8.5% for the 30-yearmortgage. (Round your answers to the nearest dollar. Use this table, ifnecessary.)(a) What are the monthly principal and interest payments (in $) for eachloan?15-year mortgage$1,911.30430-year mortgage$ 1,537.827(b) What is the total amount of interest (in $) paid on each loan?15-year mortgage$30-year mortgage$(c) Overall, how much more interest (in $) is paid by choosing the 30-yearmortgage?

Answered: Image /qna-images/answer/e766e839-74db-462c-9513-9d7243f4e2b2.jpg

Answered: (b) What is the total amount of…

(b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage 2$ 30-year mortgage $ (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is
undecided whether to choose a 15- or 30-year mortgage. The current
mortgage rate is 8% for the 15-year mortgage and 8.5% for the 30-year
mortgage. (Round your answers to the nearest dollar. Use this table, if
necessary.)
(a) What are the monthly principal and interest payments (in $) for each
loan?
15-year mortgage
$
1,911.304
30-year mortgage
$ 1,537.827
(b) What is the total amount of interest (in $) paid on each loan?
15-year mortgage
$
30-year mortgage
$
(c) Overall, how much more interest (in $) is paid by choosing the 30-year
mortgage?

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