Question

Barry and Evelyn know they want a 15 year mortgage for their new home purchase. They are planning to borrow $160,000. Two local lending institutions have similar offers. Loan A is offering a 3% annual interest rate leading to a monthly payment of $1104.93. Loan B is offering a 4% annual interest rate leading to a monthly payment of $1183.50.

Answer 1

Loan A: $198887.40

Loan B: $213030

Explanation:

To find the total payback use the equation:

P x 12 x t

P= monthly payment

t= time in years

Loan A: 1104.93 x 12 x 15= $198887.40

Loan B:1183.50 x 12 x 15= $213030

Hope this helps :)