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Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20

Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 9FPE: Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five...
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Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20
Transcribed Image Text:Increasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate the reduction in the monthly payment by increasing the down payment by the amount specified, and the amount saved on interest over the life of the loan. Assume the mortgage is for 20 years and use the table to find the monthly payments. Monthly payments on a $1,000 loan. Number of Years for the Loan Annual Interest Rate 3 10 20 30 4% $29.53 $22.58 $10.12 $6.06 $4.77 5% 29.97 23.03 10.61 6% 30.42 23.49 6.60 5.37 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32.27 25.36 13.22 9.65 8.78 12% 33.21 26.33 14.35 11.01 10.29 Amount Interest Down Increase in of Loan $243,000 Rate Payment Down Payment 5% $52,000 $23,000 $123.51, $29,642.40 $164.68, $39,523.20 $151.80, $36,432.00 $139.38, $33,451.20
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