SOLUTION: I am wretched at money! Help, please!! In order to purchase a home, a family borrows $318,000 at 7.8% for 20 years. What is their monthly payment? What is their monthly paymen

Question 153156: I am wretched at money! Help, please!!

In order to purchase a home, a family borrows $318,000 at 7.8% for 20 years. What is their monthly payment? What is their monthly payment if they secure the loan for 15 years, rather than 20 years? How much money would they save in interest charges if they paid the loan off in 15 years, rather than 20?
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
In order to purchase a home, a family borrows $318,000 at 7.8% for 20 years. What is their monthly payment? What is their monthly payment if they secure the loan for 15 years, rather than 20 years? How much money would they save in interest charges if they paid the loan off in 15 years, rather than 20?
;
The equation to calculate the monthly payment is quite complex
:
Using the finance feature on my Ti83, I came up with this:
:
$318,000 at 7.8% for 240 months: $2620.43
:
$318,000 at 7.8% for 180 months: $3002.37
;
Find the total paid in 20 yrs: 240*2620.43 = 628903.20
Find the total paid in 15 yrs: 180*3002.37 = 540426.60
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Find the difference between the two totals: $88,476.60 saved
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