TheMortgageReports.com reported the median price of a home sold in the United States hit a record high in 2020 at just above $320,000. Juan Carlos Soto, Jr., wants to purchase a new home for $308,500. Juan puts 20% down and will finance the remainder of the purchase. Compare the following two mortgage options he has: 25 years at 6.5% or 30 years at 6.5%. (Use Table 15.1.) Note: Round your intermediate calculations and final answers to the nearest cent. a. Calculate Juan's monthly payment for both the 25 and 30 year mortgage? Monthly payment for 25 year mortgage Monthly payment for 30 year mortgage b. Calculate Juan's total cost of interest for both the 25 and 30 year mortgage?
TheMortgageReports.com reported the median price of a home sold in the United States hit a record high in 2020 at just above $320,000. Juan Carlos Soto, Jr., wants to purchase a new home for $308,500. Juan puts 20% down and will finance the remainder of the purchase. Compare the following two mortgage options he has: 25 years at 6.5% or 30 years at 6.5%. (Use Table 15.1.) Note: Round your intermediate calculations and final answers to the nearest cent. a. Calculate Juan's monthly payment for both the 25 and 30 year mortgage? Monthly payment for 25 year mortgage Monthly payment for 30 year mortgage b. Calculate Juan's total cost of interest for both the 25 and 30 year mortgage?
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
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:TABLE 15.1
Amortization table (mortgage principal and interest per $1,000)
Rate
2.000
2.125
2.250
2.375
2.500
2.625
2.750
2.875
3.000
3.125
3.250
3.375
3.500
3.625
3.750
3.875
4.000
4.125
4.250
4.375
4.500
4.625
4.750
4.875
5.000
5.125
5.250
5.375
5.500
5.625
5.750
5.875
6.000
6.125
6.250
6.375
6.500
6.625
6.750
6.875
7.000
7.125
7.250
7.375
7.500
7.625
7.750
7.875
8.000
Interest
Only
0.16667
0.17708
0.18750
0.19792
0.20833
0.21875
0.22917
0.23958
0.25000
0.26042
0.27083
0.28125
0.29167
0.30208
0.31250
0.32292
0.33333
0.34375
0.35417
0.36458
0.37500
0.38542
0.39583
0.40625
0.41667
0.42708
0.43750
0.44792
0.45833
0.46875
0.47917
0.48958
0.50000
0.51042
0.52083
0.53125
0.54167
0.55208
0.56250
0.57292
0.58333
0.59375
0.60417
0.61458
0.06250
0.63542
0.64583
0.65625
0.66667
10 Year
9.20135
9.25743
9.31374
9.37026
9.42699
9.48394
9.54110
9.59848
9.65607
9.71388
9.77190
9.83014
9.88859
9.94725
10.00612
10.06521
10.12451
10.18403
10.24375
10.30369
10.36384
10.42420
10.48477
10.54556
10.60655
10.66776
10.72917
10.79079
10.85263
10.91467
10.97692
11.03938
11.10205
11.16493
11.22801
11.29130
11.35480
11.41850
11.48241
11.54653
11.61085
11.67537
11.74010
11.80504
11.87017
11.93552
12.00106
12.06681
12.13276
15 Year
6.43509
6.49281
6.55085
6.60921
6.66789
6.72689
6.78622
6.84586
6.90582
6.96609
7.02669
7.08760
7.14883
7.21037
7.27222
7.33440
7.39688
7.45968
7.52278
7.58620
7.64993
7.71397
7.77832
7.84297
7.90794
7.97320
8.03878
8.10465
8.17083
8.23732
8.30410
8.37118
8.43857
8.50625
8.57423
8.64250
8.71107
8.77994
8.84909
8.91854
8.98828
9.05831
9.12863
9.19923
9.27101
9.34130
9.41276
9.48450
9.55652
20 Year
5.05883
5.11825
5.17808
5.23834
5.29903
5.36014
5.42166
5.48361
5.54598
5.60876
5.67196
5.73557
5.79960
5.86404
5.92888
5.99414
6.05980
6.12587
6.19234
6.25922
6.32649
6.39417
6.46224
6.53070
6.59956
6.66881
6.73844
6.80847
6.87887
6.94966
7.02084
7.09238
7.16431
7.23661
7.30928
7.38232
7.45573
7.52950
7.60364
7.67814
7.75299
7.82820
7.90376
7.97967
8.05593
8.13254
8.20949
8.28677
8.36440
25 Year
4.23854
4.29966
4.36131
4.42348
4.48617
4.54938
4.61311
4.67735
4.74211
4.80738
4.87316
4.93945
5.00624
5.07352
5.14131
5.20959
5.27837
5.34763
5.41738
5.48761
5.55832
5.62951
5.70117
5.77330
5.84590
5.91896
5.99248
6.06645
6.14087
6.21575
6.29106
6.36682
6.44301
6.51964
6.59669
6.67417
6.75207
6.83039
6.90912
6.98825
7.06779
7.14773
7.22807
7.30880
7.38991
7.47141
7.55329
7.63554
7.71816
30 Year
3.69619
3.75902
3.82246
3.88653
3.95121
4.01651
4.08241
4.14892
4.21604
4.28375
4.35206
4.42096
4.49045
4.56051
4.63116
4.70237
4.77415
4.84650
4.91940
4.99285
5.06685
5.14140
5.21647
5.29208
5.36822
5.44487
5.52204
5.59971
5.67789
5.75656
5.83573
5.91538
5.99551
6.07611
6.15717
6.23870
6.32068
6.40311
6.48598
6.56929
6.65302
6.73719
6.82176
6.90675
6.99215
7.07794
7.16412
7.25069
7.33765
40 Year
3.02826
3.09444
3.16142
3.22921
3.29778
3.36714
3.43728
3.50818
3.57984
3.65226
3.72541
3.79930
3.87391
3.94923
4.02526
4.10198
4.17938
4.25746
4.33620
4.41559
4.49563
4.57629
4.65758
4.73947
4.82197
4.90505
4.98870
5.07293
5.15770
5.24302
5.32888
5.41525
5.50214
5.58952
5.67740
5.76575
5.85457
5.94385
6.03357
6.12373
6.21431
6.30531
6.39672
6.48852
6.58071
6.67327
6.76620
6.85948
6.95312
Transcribed Image Text:The MortgageReports.com reported the median price of a home sold in the United States hit a record high in 2020 at just above
$320,000. Juan Carlos Soto, Jr., wants to purchase a new home for $308,500. Juan puts 20% down and will finance the remainder of
the purchase. Compare the following two mortgage options he has: 25 years at 6.5% or 30 years at 6.5%. (Use Table 15.1.)
Note: Round your intermediate calculations and final answers to the nearest cent.
a. Calculate Juan's monthly payment for both the 25 and 30 year mortgage?
Monthly payment for 25 year mortgage
Monthly payment for 30 year mortgage
b. Calculate Juan's total cost of interest for both the 25 and 30 year mortgage?
Total cost of interest for 25 year mortgage
Total cost of interest for 30 year mortgage
c. What is the difference in interest paid between 25 and 30 year mortgage?
Difference in interest paid
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