The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $200,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 2.5%/year compounded monthly, payable over a 30-year period in 360 equal monthly installments. Option B: A fixed-rate mortgage at an interest rate of 2.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A $ option B $ (b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 30-year mortgage? $
The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $200,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 2.5%/year compounded monthly, payable over a 30-year period in 360 equal monthly installments. Option B: A fixed-rate mortgage at an interest rate of 2.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A $ option B $ (b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 30-year mortgage? $
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $200,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.)
Option A: A fixed-rate mortgage at an interest rate of 2.5%/year compounded monthly, payable over a 30-year period in 360 equal monthly installments.
Option B: A fixed-rate mortgage at an interest rate of 2.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments.
Option B: A fixed-rate mortgage at an interest rate of 2.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments.
(a) Find the monthly payment required to amortize each of these loans over the life of the loan.
(b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 30-year mortgage?
$
| option A $ |
| option B $ |
(b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 30-year mortgage?
$
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