Chris and Becky are comparing mortgages. The mortgage is for $183,500. If they choose 30 years at 5%, their monthly payment will be $985.07.

Question

Chris and Becky are comparing mortgages. The mortgage is for $183,500. If they choose 30 years at 5%, their monthly payment will be $985.07. If they choose 20 years at 4.5%, their monthly payment will be $1160.91. How much will be the total payback amount for each loan?

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Alaia 4 months 2022-01-06T23:23:27+00:00 2 Answers 0 views 0

Answers ( )

    0
    2022-01-06T23:24:42+00:00

    Answer:

    For 30 years at 5% = $354,625.2

    For 20 years at 4.5% = $278,618.4

    Step-by-step explanation:

    The total payback for each payment is given by the monthly payment multiplied by the total number of months for the payment period (years).

    1) For 30 years at 5%

    Total number of months in 30 years = 30 x 12 = 360 months

    Payback = $985.07 x 360 = $354,625.2

    2) For 20 years at 4.5%

    Total number of months in 20 years = 20 x 12 = 240 months

    Payback = $1160.91 x 240 = $278,618.4

    0
    2022-01-06T23:24:52+00:00

    Answer:

    Total payback for Loan type 1 = $354,625.20

    Total payback for Loan type 2 = $278,618.40

    Explanation

    Total payback of a loan consists of the summation of the amount of mortgage to be paid and total interest to be paid after the given number of years.

    Total payback of a loan can also be calculated by multiplying your monthly payment of the loan by the total number of months given for payment.

    a. For Loan type 1

    In the question we have been given or monthly payment = $985.07

    The formula for Total payback for Loan type 1 = Monthly payment × number of months

    Numbers of years for payment of loan = 30 years

    1 years = 12 months

    Hence,

    Number of months = 30 years × 12 months

    Number of months = 360 months

    Total payback of loan = $985.07 × 360 months

    = $354,625.20

    b. For Loan type 2

    In the question we have been given or monthly payment = $1160.91

    The formula for Total payback for Loan type 1 = Monthly payment × number of months

    Numbers of years for payment of loan = 30 years

    1 years = 12 months

    Hence,

    Number of months = 20 years × 12 months

    Number of months = 240 months

    Total payback of loan = $1160.91 × 240 months

    = $278,618.4

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