1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Maksim231197 [3]
2 years ago
15

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate

and have the same closing costs. You need a $200,000 loan Option 1 a 30-year loan at an APR of 10% Option 2 a 15-year loan at an APR of 9.5%. Find the monthly payment for each option. The monthly payment for option 1 is S The monthly payment for option 2 is S (Do not round until the final answer Then round to the nearest cent as needed) Find the total amount paid for each option The total payment for option 1 is S The total payment for option 2 is S (Use the answers from the previous step to find this answer Round to the nearest cent as needed) Compare the two options Which appears to be the better option? OA Option 2 will always be the better option B. Option 1 is the better option, but only if the borrower plans to stay in the same home for the entire term of the loan OC. Option 1 will always be the better option OD. Option 2 is the better option, but only if the borrower can afford the higher monthly payments over the entire term of the loan 0​
Mathematics
1 answer:
sertanlavr [38]2 years ago
5 0

The monthly payment for option 1 is $1755.144 and option 2 is $2088.97, total amount for option 1 is $631851.84 and option 2 is $376014.6, and on comparing option 2 will be better option.

Given that for $200,000 loan Option 1 is a 30-year loan at an APR of 10% Option 2 is a 15-year loan at an APR of 9.5%.

A concept that implies that the future value of money will be lower than its present value due to several factors such as inflation is known as TVM(time of value money).

Monthly Payments

Option 1

Loan Amount = $200,000

Number of payments = 30×12 = 360

Monthly interest rate = 10%/12 = 0.008333333

Monthly payment = Loan amount (1+ monthly interest rate)ⁿ×monthly interest rate/[(1+monthly interest rate)ⁿ- 1]

Monthly payment=200,000×(1+0.008333333)³⁶⁰×(0.008333333)/[(1+0.008333333)³⁶⁰-1]

Monthly payment=33062.328/18.83739

Monthly payment=$1755.144

Option 2

Loan Amount = $200,000

Number of payments = 15 x 12=180

Monthly interest rate = 9.5%/12=0.00792

Monthly payment = 200,000(1+0.00792)¹⁸⁰(0.00792)/[(1+0.00792)¹⁸⁰-1]

Monthly payment=6553.096/3.137

Monthly payment=$2088.97

Total Payments

Option 1

As we've found out the monthly payments, we now need to multiply it by the number of months.

$1755.144×360 = $631851.84

Option 2

$2088.97×180 = $376014.6

Conclusion

Option 2 will always be the better option economically as it saves $255837.24 ($631851.84 - $376014.6) in total payments.

Hence, For $200,000 loan Option 1 a 30-year loan at an APR of 10% Option 2 a 15-year loan at an APR of 9.5% is the monthly payment for option 1 is $1755.144 and option 2 is $2088.97, total amount for option 1 is $631851.84 and option 2 is $376014.6, and on comparing option 2 will be the better option.

Learn more about monthly cost from here brainly.com/question/1476828.

#SPJ1

You might be interested in
point) Covert the following integers from decimal notation to binary notation. (Do not put extra zeros in front of your binary n
Paha777 [63]

Answer:

The binary notation of the integer 234 is 11101010.

Step-by-step explanation:

To convert decimal to binary you must:

  1. Divide the number by 2.
  2. Get the integer quotient for the next iteration.
  3. Get the remainder for the binary digit.
  4. Repeat the steps until the quotient is equal to 0.
  5. Write the remainders from bottom to top.

So, to convert the decimal number 234 to binary

\left\begin{array}{ccc}\mathrm{Division\:by \:2}&\mathrm{Quotient}&\mathrm{Remainder}\\234/2&117&0\\117/2&58&1\\58/2&29&0\\29/2&14&1\\14/2&7&0\\7/2&3&1\\3/2&1&1\\1/2&0&1\end{array}\right

The binary notation of the integer 234 is 11101010.

3 0
3 years ago
Keith bought a tree for his backyard. The graph shows the height of the tree after a certain number of years.
Vikentia [17]

Answer:18

Step-by-step explanation:

Its is 18 caycausecause the arrow is pointing next to it

1

7 0
1 year ago
Evaluate the expression when x=3 and y=-4 . <br><br> -6x+y<br><br><br><br>Easyyyy....
RSB [31]

Answer:

-22

Step-by-step explanation:

7 0
3 years ago
√70 is ________________________ because _________________________ . Choose the best response to fill in the blanks above
snow_tiger [21]

Answer:

\sqrt{70} is<u> Rational</u> because<u> it's a non-perfect square</u>

4 0
2 years ago
How many odd numbers are in 10 to 50?
dlinn [17]

Answer:

20

Step-by-step explanation:

11,13,15,17,19,21,23,25,27,29,31,33,35,37,39,41,43,45,47,49

3 0
2 years ago
Other questions:
  • The tax rate as a percent, r, charged on an item can be determined using the formula – 1 = r, where c is the final cost of the i
    9·2 answers
  • How do I this question?
    11·1 answer
  • Evaluate mentally. Share your strategies.
    8·1 answer
  • Tammy bought 36 ounces of nuts at the store. How much is this in pounds?
    8·2 answers
  • Find the area of the figure below formed from a triangle and from a rectangle in square millimeters
    9·2 answers
  • Which transformations could have taken place to map △ABC to △A"B"C"?
    12·2 answers
  • Need help to solve. ​
    14·1 answer
  • What is the volume of the pyramid shown below?
    13·2 answers
  • Please solve it for me! I need HELP! I hope whoever answers this, lives a peaceful and happy life!
    11·1 answer
  • One-half the sum of two numbers is 12. One of the numbers is three more than two times the other number. What are the two number
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!