Question

to determine the regular payment​ amount, rounded to the nearest dollar. In terms of paying less in​ interest, which is more economical for a ​$ ​mortgage: a​ 30-year fixed-rate at ​% or a​ 20-year fixed-rate at ​%? How much is saved in​ interest?

Answer 1

Answer:

the numbers are missing, so I looked fro similar questions:

Which is more economical for a $210.000 mortgage: a 30-year fixed-rate at 9% or a 20-year fixed-rate at 8.5%? How much is saved in interest?

if you take the 30 year mortgage, your monthly payment will be:

monthly payment = present value / PV annuity factor

• present value = $210,000
• PV annuity factor, 0.75%, 360 periods = 124.2817

monthly payment = $210,000 / = $1,689.71

total payments = $1,689.71 x 360 = $608,295.60

total interests paid = $608,295.60 - $210,000 = $398,295.60

if you take the 20 year mortgage, your monthly payment will be:

monthly payment = present value / PV annuity factor

• present value = $210,000
• PV annuity factor, 0.7083%, 240 periods = 115.2308

monthly payment = $210,000 / = $1,822.43

total payments = $1,822.43 x 240 = $437,383.20

total interests paid = $437,383.20 - $210,000 = $227,383.20

if you take the 20 year mortgage, you will save $398,295.60 - $227,383.20 = $161,912.40 in interests