5) Imagine that a family just secured a loan for their new home with the following terms:
Loan amount: $160,000 Interest rate: 7% Length of loan: 30 years
Regular Monthly payments: $1064.48 (that is “R” already calculated for you!)
The wife, a sharp former MATH 170 student, suggests that if they make payments of HALF their regular monthly payments every two weeks (instead of a full payment once per month), they would pay off the loan much more quickly and save A LOT of money overall. Find the total amount they would save if they did this.
Hints (follow these steps): Find the half payment (one half of R that’s given!!). If payments are every two weeks, what is n (how many two weeks periods are there in one year?). Use those terms (new R and n) and solve for time. Now find total payments in this case (Rnt), and compare to original loan’s total payments.
I need a answer for this question and it has to be step by step