Question

Your real estate agent mentions that homes in your price range require a payment of $1,200 per month for 30 years at 9% interest compounded monthly. What is the size of the mortgage with these terms?

A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage from a 30-year mortgage." Calculate the difference in payments on a 30-year mortgage at 9% interest versus a 15-year mortgage with 8.5% interest. Both mortgages are for $100,000 and have monthly payments. What is the difference in total dollars that will be paid to the lender under each loan? (Round the monthly payment amounts to 2 decimal places. Both interest rates are compounded monthly.)

How much interest will be earned in the next year on an investment paying 12% compounded annually if $100 was just credited to the account for interest?

Answer 1