In terms of painless less in interest, which is more economical for a $120,000 mortgage: a 30 year fixed rate at 7.5% or a 15 year fixed rate at 7%? how much is saved in interest? use the following formula to determine the regular payment amount.  Determine which loan is more economical. Choose the correct answer below. a.The 30 year 7.5% loan is more economical. or b. The 15 year 7% loan is more economical. The buyer will save an interest in proximately $___

Q: (3) 11.015229%

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A:

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A: PV is the current worth of cash flows that are expected to occur in future.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.