Question

A family wants to purchase a house that costs $185,000 . They plan to take out a $135,000 mortgage on the house and put $50,000 as a down payment. The bank informs them that with a 15-year mortgage their monthly payment would be $925.14 and with a 30-year mortgage their monthly payment would be $615.65 . 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. Savings = $

Answer 1

$55,108.80

Explanation:

15 year mortgage

925.14/month times 180 months =

$166,525.20

30 year mortgage

615.65/month times 360 months =

$221,634

$221,634 - $166,525.20 =

$55,108.80

So the difference between the 15 year mortgage and the 30 year mortgage is $55,108.80

Answer 2

4,592.4

Explanation:

925.14×15 = 13,877.1

615.65x30=18,469.5

18,469.5

- 13,877.1

= 4,592.4