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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Section 8.7 - Worksheet
The Cost of Home Ownership
Comparing Mortgage Interest for 30-year rate vs 15-year rate.
In the lesson notes example, the $175,500 mortgage was financed with a 30-year
fixed 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 monthly
payment if the time of the mortgage is reduced to 15 years. Round to the
nearest dollar.
b) Find the total interest paid over 15 years.
c) How much interest is saved by reducing the mortgage from 30 to 15
years?
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Date Name Section 8.7 - Worksheet The Cost of Home Ownership Comparing Mortgage Interest for 30-year rate vs 15-year rate. In the lesson notes example, the $175,500 mortgage was financed with a 30-year fixed 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 monthly payment if the time of the mortgage is reduced to 15 years. Round to the nearest dollar. b) Find the total interest paid over 15 years. c) How much interest is saved by reducing the mortgage from 30 to 15 years?

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Step 1

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

Finance homework question answer, step 1, image 1

Answer: Monthly payment is of $1627.

Step 2

b) Total interest paid can be calculated as below:

Finance homework question answer, step 2, image 1

Answer: Total interest paid is $117360

...

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