document.write( "Question 934252: Kim Barnes bought a new home for 250,000. She made a 30% down payment and got a 4% 20 year loan. Amortize this loan over the first 2 months. Kim would be able to get a mortgage at 3.5%. Is it worth it for Kim to pay one point for the lower interest rate? Support your answer with numbers. \n" ); document.write( "
Algebra.Com's Answer #568237 by ptfile(81)\"\" \"About 
You can put this solution on YOUR website!
\r\n" );
document.write( "Let A = Periodic amount\r\n" );
document.write( "    R = Interest rate\r\n" );
document.write( "    N = Number of intervals\r\n" );
document.write( "    P = Principal\r\n" );
document.write( "    T = Duration of the loan\r\n" );
document.write( "\r\n" );
document.write( "Downpayment\r\n" );
document.write( "(250000)(.30)=75000\r\n" );
document.write( "250000-75,000=175000\r\n" );
document.write( "\r\n" );
document.write( "\"A=+P%28%28%28r%2Fn%29%281%2Br%2Fn%29%5E%28nt%29%29%2F%28%281%2Br%2Fn%29%5E%28nt%29-1%29%29\"\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "\"A=175000%28%28.003333333%29%282.22258191%29%2F%28%282.22258191%29-1%29%29\"\r\n" );
document.write( "\"A=175000%28.007408606%2F1.22258191%29\"\r\n" );
document.write( "\"A=175000%28.006059803%29\"\r\n" );
document.write( "\"A=1060.47\"\r\n" );
document.write( "\r\n" );
document.write( "Payment Amount Interest Principal Balance\r\n" );
document.write( "0                                 175000\r\n" );
document.write( "1       1060.47 583.33   477.13   174522.87\r\n" );
document.write( "2       1060.47 581.74   478.72   174044.15\r\n" );
document.write( "\r\n" );
document.write( "\"A=+P%28%28%28r%2Fn%29%281%2Br%2Fn%29%5E%28nt%29%29%2F%28%281%2Br%2Fn%29%5E%28nt%29-1%29%29\"\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "\"A=175000%28%28.002916667%29%282.011702195%29%2F%28%282.011702195%29-1%29%29\"\r\n" );
document.write( "\"A=175000%28.005867465%2F1.011702195%29\"\r\n" );
document.write( "\"A=175000%28.005799597%29\"\r\n" );
document.write( "\"A=1014.93\"\r\n" );
document.write( "\r\n" );
document.write( "Payment Amount Interest Principal Balance\r\n" );
document.write( "0                                 175000\r\n" );
document.write( "1       1014.93 510.42    504.51  174495.49\r\n" );
document.write( "2       1014.93 508.95    505.98  173989.50\r\n" );
document.write( "\r\n" );
document.write( "It would be beneficial for Kim to get a lower interest rate for her mortgage.\r\n" );
document.write( "\r\n" );
document.write( "
\n" ); document.write( "
\n" );