You have decided to purchase a house for $225,000 and are
evaluating your options for the mortage. Assume that your down
payment will be 20% of the purchase price, payments will be made
monthly, and the first payment will be made one month from
today.
a. What is the mortgage amount? (The amount you borrow)
b. If you select the 30-year mortgage, the interest rate will
be 4.5% annually. What is the
monthly payment?
c. Suppose that the bank is also offering a 15-year mortgage
at 4.25% annually. What is the
monthly payment on this mortgage?
d. What is the total of all payments for each of mortgage?
Which one costs you the least over
the life of the mortgage?
Please use excel to calculate the numbers