Explanation Given Information: Amount financed is $ 100000, interest rate is 9.25 % for 30 years and the interest rate is 8.5 % for 15 years Formula used: The formula for the number of $ 1000 is Number of $ 1000 s financed = Amount Financed 1000 Use the table 14.1 to calculate the table factor. Locate the table factor on the intersection of the number of years column and the interest rate row. The formula for Monthly payment is Monthly Payment = Number of 1000 s financed × Table Factor And, Number of payments = Term of loan × 12 Total interest is given by, Total Interest = ( Monthly payment × Number of payments ) − Amount Financed Now, Difference in total interest = total interest for 30years − total interest for 15years Calculation: Consider the provided values, Amount Financed = $100,000 Interest Rate = 9 .25 % Term of Loan = 3 0 years As, Number of $ 1000 s financed = Amount Financed 1000 To calculate number of $ 1000 financed, apply the above formula: Number of $ 1000 s financed = Amount Financed 1000 = 100000 1000 = 100 Use the table 14.1 for locating the table factor at the intersection of 30 years (column) and 9.25 % interest rate (row). So, the table factor for 30 years at 9.25 % rate of interest is 8.23. As, Monthly Payment = Number of 1000 s financed × Table Factor To calculate Monthly Payment, use above formula: Monthly Payment = Number of 1000 s financed × Table Factor = 100 × 8.23 = $ 823 As, Number of payments = Term of loan × 12 Use above formula to calculate the number of payments: Number of payments = Term of loan × 12 = 30 × 12 = 360 Then, Total Interest for 30 years = ( Monthly Payment × Number of Payments ) − Amount Financed = ( 823 × 36 0 ) − 100000 = $196280 Now consider, Amount Financed = $100,000 Interest Rate = 8

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

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Chapter 14, Problem 16AT

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To calculate: The difference in the total interest to be paid on $100,000 when interest rate is 9.25 % for 30 years and when interest rate is 8.5 % for 15 years.

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Chapter 14, Problem 15AT

Chapter 14, Problem 17AT

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Chapter 14 Solutions

Contemporary Mathematics for Business & Consumers

Ch. 14.I - What is the monthly payment and total interest on...Ch. 14.I - Prob. 2TIE Ch. 14.I - Prob. 3TIE Ch. 14.I - Prob. 4TIE Ch. 14.I - Prob. 5TIE Ch. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 2RE Ch. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 4RE Ch. 14.I - Prob. 5RE

Ch. 14.I - Prob. 6RE Ch. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 8RE Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - Ben and Mal Scott plan to buy a home for $272,900....Ch. 14.I - 16. Michael Sanchez purchased a condominium for...Ch. 14.I - 17. Luis Schambach is shopping for a 15-year...Ch. 14.I - 18. Phil Pittman is interested in a fixed-rate...Ch. 14.I - 19. Larry and Cindy Lynden purchased a townhome in...Ch. 14.I - Heather Gott bought a home with an adjustable-rate...Ch. 14.I - Joe and Gloria Moutran art purchasing a house in...Ch. 14.I - 22. You are a real estate broker for Aurora...Ch. 14.II - Justin Schaefer owns a home that was recently...Ch. 14.II - Roman Bass cams a gross income of $3,100 per...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - Calculate the housing expense ratio and the total...Ch. 14.II - Calculate the housing expense ratio and the total...Ch. 14.II - Prob. 10RE Ch. 14.II - Prob. 11RE Ch. 14.II - Prob. 12RE Ch. 14.II - Prob. 13RE Ch. 14.II - Prob. 14RE Ch. 14.II - Use Exhibit 14-4, Lending Ratio Guidelines, on...Ch. 14.II - 16. Ronald and Samantha Brady recently had their...Ch. 14.II - Prob. 17RE Ch. 14.II - Ransford and Alda Mariano own a home recently...Ch. 14.II - Prob. 19RE Ch. 14.II - Jamie and Alice Newmark have a combined monthly...Ch. 14.II - Prob. 21RE Ch. 14.II - According to moncy.CNN.com. with mortguge rates...Ch. 14 - 1. Land, including permanent improvements on that...Ch. 14 - A(n) ___________ is a loan in which real property...Ch. 14 - Mortgage ___________ points are an extra charge...Ch. 14 - Prob. 4CR Ch. 14 - 5. A(n) ___________ account is a bank account used...Ch. 14 - Prob. 6CR Ch. 14 - Prob. 7CR Ch. 14 - Prob. 8CR Ch. 14 - Prob. 9CR Ch. 14 - Prob. 10CR Ch. 14 - A home equity ___________ is a lump-sum second...Ch. 14 - Prob. 12CR Ch. 14 - Prob. 13CR Ch. 14 - Prob. 14CR Ch. 14 - Prob. 1AT Ch. 14 - Prob. 2AT Ch. 14 - Suzanne Arthurs purchased a home with a $146,100...Ch. 14 - Prob. 4AT Ch. 14 - Prob. 5AT Ch. 14 - Prob. 6AT Ch. 14 - Prob. 7AT Ch. 14 - Prob. 8AT Ch. 14 - Prob. 9AT Ch. 14 - Prob. 10AT Ch. 14 - Prob. 11AT Ch. 14 - 12. Dale Evans bought the Lazy D Ranch with an...Ch. 14 - 13. Diversified Investments purchased a 24-unit...Ch. 14 - Larry Mager purchased a ski lodge in Telluride for...Ch. 14 - 15. A Denny’s Restaurant franchisee is looking for...Ch. 14 - Prob. 16AT Ch. 14 - Adam Marsh is purchasing a $134,000 condominium...Ch. 14 - Prob. 18AT Ch. 14 - Prob. 19AT Ch. 14 - Prob. 20AT Ch. 14 - 21. Phil Armstrong earns a gross income of $5,355...Ch. 14 - 22. Magda Leon is applying for a home mortgage...

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The difference in the total interest to be paid on $ 100 , 000 when interest rate is 9.25 % for 30 years and when interest rate is 8.5 % for 15 years.

Solution Summary: The author calculates the difference in the total interest to be paid on a 30-year fixed rate mortgage at 9.25 % when interest rate is 8.5

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To calculate: The difference in the total interest to be paid on $100,000 when interest rate is 9.25 % for 30 years and when interest rate is 8.5 % for 15 years.

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Chapter 14 Solutions