QuestionCalculate the total payback for a \ $249,000 mortgage: 15 years at 4\% ($ 1841.82/month) and 20 years at 5\% ($1643.29/month).

Studdy Solution

STEP 1

Assumptions1. The mortgage amount is $249,000. The first loan option is for15 years at4% interest3. The second loan option is for20 years at5% interest4. The monthly payment for the first loan is$ 1841.825. The monthly payment for the second loan is $1643.296. The total payback amount is the monthly payment multiplied by the total number of months

STEP 2

First, we need to find the total payback amount for the first loan. We can do this by multiplying the monthly payment by the total number of months.
$Total\, payback\, amount\, for\, first\, loan = Monthly\, payment\, for\, first\, loan \\times Total\, number\, of\, months\, for\, first\, loan$

STEP 3

Now, plug in the given values for the monthly payment for the first loan and the total number of months for the first loan to calculate the total payback amount for the first loan.
$Total\, payback\, amount\, for\, first\, loan = \$1841.82 \\times15\, years \\times12\, months/year$

STEP 4

Calculate the total payback amount for the first loan.
$Total\, payback\, amount\, for\, first\, loan = \$1841.82 \\times15 \\times12 = \$331,527.60$

STEP 5

Next, we need to find the total payback amount for the second loan. We can do this by multiplying the monthly payment by the total number of months.
$Total\, payback\, amount\, for\, second\, loan = Monthly\, payment\, for\, second\, loan \\times Total\, number\, of\, months\, for\, second\, loan$

STEP 6

Now, plug in the given values for the monthly payment for the second loan and the total number of months for the second loan to calculate the total payback amount for the second loan.
$Total\, payback\, amount\, for\, second\, loan = \$1643.29 \\times20\, years \\times12\, months/year$

STEP 7

Calculate the total payback amount for the second loan.
$Total\, payback\, amount\, for\, second\, loan = \$1643.29 \\times20 \\times12 = \$394,390.80$ The total payback amount for the first loan is \$331,527.60 and for the second loan is \$394,390.80.

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