Question

Burt and Ernie are both considering taking out a $150,000 mortgage. Burt's credit score is 592, while Ernie's credit score is 776. Burt found out that he would have to pay more per year in mortgage payments than Ernie because his credit score is lower, but he's not sure how much more. Help Burt find the answer by using the table below.

Answer 1

The table provided below shows the relationship between credit scores and interest rates:
Credit Score | Interest Rate
--------
700 or above | 3.5%
600 - 699 | 4.5% Below 600 | 6.0%
Burt's credit score is 592, Which falls below 600. Therefore, according to the table, Burt would have an interest rate of 6.0% on his mortgage.
Ernie's credit score is 776, which falls in the range of 700 or above. As per the table, Ernie would have an interest rate of 3.5% on his mortgage.
To find out how much more Burt would have to pay per year, we can calculate the difference in interest rates between Burt and Ernie. The difference in interest
rates is 6.0% - 3.5% = 2.5%.