Question

For a $72,000 mortgage at 9 percent, the monthly payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage. What would be the total savings in interest by using a 15-year mortgage?

A) $27,180
B) $54,360
C) $77,040
D) $131,400

Answer 1

The total savings in interest by using a 15-year mortgage would be $116,640.

Step-by-step explanation:

To find the total savings in interest by using a 15-year mortgage, we first need to calculate the total amount paid over 15 years and 30 years for each mortgage.

For the 15-year mortgage, the total amount paid over 15 years would be $730/month x 12 months/year x 15 years = $131,400.

For the 30-year mortgage, the total amount paid over 30 years would be $579/month x 12 months/year x 30 years = $248,040.

The total savings in interest by using a 15-year mortgage would be $248,040 - $131,400 = $116,640.