The Mrtinezes are planning to refinanace their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $100,000. Their finance company has offerend them two options: option a: A fixed rate mortage at an interest rate of 6.5%per year compounded monthly, payable over a 25 year period in 300 equal monthly installments. option b: A fixed rate mortgage an interest rate of 6.25% per year compounded monthly, payable over a 15 year period in 180 equal montly installments. a)find the monthly payment required to amortize each of these loans over the life of the loan (round to the nearest cent) option a option b b) HOw much interst would the Martinezessave in they chose the 15 year mortgage instead of the 25 year mortgage? Use the rounded mothly payment values from part a ( round your answer to the nearest cent)
The Mrtinezes are planning to refinanace their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $100,000. Their finance company has offerend them two options:
option a: A fixed rate mortage at an interest rate of 6.5%per year compounded monthly, payable over a 25 year period in 300 equal monthly installments.
option b: A fixed rate mortgage an interest rate of 6.25% per year compounded monthly, payable over a 15 year period in 180 equal montly installments.
a)find the monthly payment required to amortize each of these loans over the life of the loan (round to the nearest cent)
option a
option b
b) HOw much interst would the Martinezessave in they chose the 15 year mortgage instead of the 25 year mortgage? Use the rounded mothly payment values from part a ( round your answer to the nearest cent)
EMI refers to Equal monthly installments which means the repayment of the total loan by the borrower to the lender in equal monthly payments which includes some part of the principal as well as interest in it.
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