Question

A family wants to purchase a house that costs ​$165,000. They plan to take out a ​$125,000 mortgage on the house and put ​$40,000 as a down payment. The bank informs them that with a​ 15-year mortgage their monthly payment would be ​$774.78 and with a​ 30-year mortgage their monthly payment would be ​$513.01. Determine the amount they would save on the cost of the house if they selected the​ 15-year mortgage rather than the​ 30-year mortgage.

Answer 1

Answer: 180 months in 15 years so 180 x 774.78 = 139460.4

and 360 months in 30 years so 360 x 513.01 = 184683.6

they would save 184683.6 - 139460.4 so 45223.2