The price of a home is $120,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 10% or 30-year fixed at 10%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the regular payment amount. PMT= A [[]] - nt Find the monthly payment for the 15-year option. $ (Round to the nearest dollar as needed.)

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
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The price of a home is $120,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 10% or 30-year fixed at 10%.
Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the
regular payment amount.
PMT=
A
[[]]
- nt
Find the monthly payment for the 15-year option.
$
(Round to the nearest dollar as needed.)
Transcribed Image Text:The price of a home is $120,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 10% or 30-year fixed at 10%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the regular payment amount. PMT= A [[]] - nt Find the monthly payment for the 15-year option. $ (Round to the nearest dollar as needed.)
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