a) The monthly payment for each loan is as follows:
30-year $1,954.93
15-year $3,053.25
b) The savings in interest by using the 15-year loan is <u>$154,189,20</u> ($286,774.20 - $132,585).
c) No. the monthly payment for the 15-year loan is <u>not twice</u> that of the 30-year loan as the loan term.
d) The interest savings for the 15-year loan are <u>more</u> than one-half of the interest paid on the 30-year loan.
<h3>How are the calculations for periodic payments done?</h3>
The calculations for the monthly payments, including interests can be carried out using an online finance calculator, as follows:
<h3>30-year Loan:</h3>
N (# of periods) = 360 months (12 x 30 years)
I/Y (Interest per year) = 3.85%
PV (Present Value) = $417000
FV (Future Value) = $0
<u>Results</u>:
PMT = $1,954.93
Sum of all periodic payments = $703,774.80 ($1,954.93 x 360)
Total Interest = $286,774.20 ($703,774.80 - $417,000)
<h3>15-year Loan:</h3>
N (# of periods) = 180 months (12 x 15 years)
I/Y (Interest per year) = 3.85%
PV (Present Value) = $417000
FV (Future Value) = $0
<u>Results</u>:
PMT = $3,053.25
Sum of all periodic payments = $549,585 ($3,053.25 x 180)
Total Interest = $132,585 ($549,585 - $417,000)
Learn more about periodic payments at brainly.com/question/13098072
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