sh is taking out a mortgage for $161,000 to buy a new house and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the mortgage loan, and by how much. (a) His credit union has offered him a 40-year mortgage loan at an annual interest rate of 4.1%. Find the monthly payment. (b) A bank has offered him a 15-year mortgage loan at an annual interest rate of 3.8%. Find the monthly payment. (c) Suppose Josh pays the monthly payment each month for the full term. Which lender's mortgage loan would have the lowest total amount to pay off, and by how much? • Credit union The total amount paid would be $____ less than to the bank. • Bank The total amount paid would be $____ less than to the credit union.
sh is taking out a mortgage for $161,000 to buy a new house and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the mortgage loan, and by how much. (a) His credit union has offered him a 40-year mortgage loan at an annual interest rate of 4.1%. Find the monthly payment. (b) A bank has offered him a 15-year mortgage loan at an annual interest rate of 3.8%. Find the monthly payment. (c) Suppose Josh pays the monthly payment each month for the full term. Which lender's mortgage loan would have the lowest total amount to pay off, and by how much? • Credit union The total amount paid would be $____ less than to the bank. • Bank The total amount paid would be $____ less than to the credit union.
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
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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Josh is taking out a mortgage for $161,000 to buy a new house and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the mortgage loan, and by how much.
(a) His credit union has offered him a 40-year mortgage loan at an annual interest rate of 4.1%. Find the monthly payment.
(b) A bank has offered him a 15-year mortgage loan at an annual interest rate of 3.8%. Find the monthly payment.
(c) Suppose Josh pays the monthly payment each month for the full term. Which lender's mortgage loan would have the lowest total amount to pay off, and by how much?
• Credit union
The total amount paid would be $____ less than to the bank.
• Bank
The total amount paid would be $____ less than to the credit union.
Transcribed Image Text:Josh is taking out a mortgage for $161,000 to buy a new house and is deciding between the offers from two lenders.
He wants to know which one would be the better deal over the life of the mortgage loan, and by how much.
Answer each part. Do not round intermediate computations, and round your answers to the nearest cent.
If necessary, refer to the list of financial formulas.
(a) His credit union has offered him a 40-year mortgage loan at an annual interest rate of
4.1%. Find the monthly payment.
2$
(b) A bank has offered him a 15-year mortgage loan at an annual interest rate of 3.8%.
Find the monthly payment.
2$
(c) Suppose Josh pays the monthly payment each month for the full term. Which lender's
mortgage loan would have the lowest total amount to pay off, and by how much?
O Credit union
The total amount paid would be $
less than to the bank.
O Bank
The total amount paid would be $|
less than to the credit union.
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