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Compare the monthly payments and total loan costs for the following pairs of loan options. Assume...

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Advance Math

Compare the monthly payments and total loan costs for thefollowing pairs of loan options. Assume that both loans are fixedrate and have the same closing costs.

You need a ​$110,000 loan.

Option​ 1: a​ 30-year loan at an APR of 7.25​%.

Option​ 2: a​ 15-year loan at an APR of 6.8%.

1.) Find the monthly payment for each option.

The monthly payment for option 1 is what?

The monthly payment for option 2 is​what?.

​(Do not round until the final answer. Then round to the nearestcent as​ needed.)

2.) Find the total payment for each option.

The total payment for option 1 iswhat?

The total payment for option 2 iswhat?

​(Round to the nearest cent as​ needed.)

Compare the two options. Which appears to be thebetter​ option?

A.Option 2 is the better​ option, but only if the borrower canafford the higher monthly payments over the entire term of theloan.

B.Option 1 will always be the better option.

C.Option 1 is the better​ option, but only if the borrower plansto stay in the same home for the entire term of the loan.

D.Option 2 will always be the better option

Answer & Explanation Solved by verified expert
4.0 Ratings (718 Votes)
Solution Loan 110000Option 1n 30 years adjust for monthly compounding 3012 360APR 725 adjust for monthly compoundingr 0072512 0 0060417Calculate the    See Answer
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