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Question 1111723: You want to buy a $242,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan at 5.45% interest for the rest.
a) How much is the loan amount going to be? (my answer is 217800)
b) What will your monthly payments be? (my answer is 1229.8)
c) How much total interest do you pay?
d) Suppose you want to pay off the loan in 15 years rather than 30. What will your monthly payment be?
e) How much money in interest will you save if you finance for 15 years instead of 30 years?
Can you help me the rest?
Answer by greenestamps(13198)   (Show Source):
You can put this solution on YOUR website!
Your answers for a and b are right; so you know what you are doing. You shouldn't need much help with the rest....
For part c, multiply the monthly payment amount (answer for part b) times the number of payments (360) to get the total amount of all the payments; the interest you pay is the difference between that total and the original amount of the loan.
For part d the calculation is the same as what you did for part b, except now you are making 180 payments instead of 360.
Then calculate the total amount of payments for the 15-year loan, and the total amount of interest for the 15-year loan (using the same process as in part c). Then the answer for part e is the difference between the two amounts of total interest for the 30-year and 15-year loans.
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