Chapter 8.7, Problem 3E

In Exercises 1-10, use

$PMT=\frac{P\left(\frac{r}{n}\right)}{\left[1-{\left(1+\frac{r}{n}\right)}^{-nt}\right]}$

to determine the regular payment amount, rounded to the nearest dollar.

The price of a small cabin is $100,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20-year fixed at 8% or 30-year at 8%. Calculate the amount of interest paid for each optain. How much does the buyer save in interest with the 20-year obtain?