Question

nicole has the choice of taking out a 30-year loan for $165,000 at 9.1% interest, compounded monthly, or the same loan at 25 years for a higher monthly payment. how much more is the monthly payment for the 25-year loan than the monthly payment for the 30- year loan

Answer 1

Answer:

The monthly payment for 25 years is $56.50 more than the monthly payment for 30 years loan.

Step-by-step explanation:

The formula to be used is :

$\frac{p\times r\times (1+r)^{n} }{(1+r)^{n}-1 }$

1st scenario:

p = 165000

n = $30\times12=360$

r = $(\frac{9.1}{12})/100$ = 0.00758

Putting the values in the formula we get

$\frac{165000\times0.00758 \times (1.00758)^{360} }{(1.00758)^{360}-1 }$

= $1339.045

2nd scenario:

p = 165000

n = $25\times12=300$

r = $(\frac{9.1}{12})/100$ = 0.00758

Putting the values in the formula we get

$\frac{165000\times0.00758 \times (1.00758)^{300} }{(1.00758)^{300}-1 }$

= $1395.540

The difference in the monthly payments are =

$1395.540-1339.045=56.495$ dollars ≈ $56.50

Therefore, the monthly payment for 25 years is $56.50 more than the monthly payment for 30 years loan.

Answer 2

Answer:

Apex: 56.47

Step-by-step explanation:

apex