DateNameSection 8.7 - WorksheetThe Cost of Home OwnershipComparing Mortgage Interest for 30-year rate vs 15-year rate.In the lesson notes example, the \$175,500 mortgage was financed with a 30-yearfixed rate at 7.5%. The total interest paid over 30 years was approximately\$266,220.a) Use the loan payment formula for installment loans to find the monthlypayment if the time of the mortgage is reduced to 15 years. Round to thenearest dollar.b) Find the total interest paid over 15 years.c) How much interest is saved by reducing the mortgage from 30 to 15years?

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Asked Feb 5, 2020
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Step 1

Loan payment formula can be used as below to calculate monthly payment

Answer: Monthly payment is of \$1627.

Step 2

b) Total interest paid can be calculated as below:

Answer: Total interest paid is \$117360

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