The Mrtinezes are planning to refinanace their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $100,000. Their finance company has offerend them two options: option a: A fixed rate mortage at an interest rate of 6.5%per year compounded monthly, payable over a 25 year period in 300 equal monthly installments. option b: A fixed rate mortgage an interest rate of 6.25% per year compounded monthly, payable over a 15 year period in 180 equal montly installments. a)find the monthly payment required to amortize each of these loans over the life of the loan (round to the nearest cent) option a option b b) HOw much interst would the Martinezessave in they chose the 15 year mortgage instead of the 25 year mortgage? Use the rounded mothly payment values from part a ( round your answer to the nearest cent)

The Mrtinezes are planning to refinanace their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $100,000. Their finance company has offerend them two options: option a: A fixed rate mortage at an interest rate of 6.5%per year compounded monthly, payable over a 25 year period in 300 equal monthly installments. option b: A fixed rate mortgage an interest rate of 6.25% per year compounded monthly, payable over a 15 year period in 180 equal montly installments. a)find the monthly payment required to amortize each of these loans over the life of the loan (round to the nearest cent) option a option b b) HOw much interst would the Martinezessave in they chose the 15 year mortgage instead of the 25 year mortgage? Use the rounded mothly payment values from part a ( round your answer to the nearest cent)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $100,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 2.5%/year compounded monthly, payable over a 30-year period in 360 equal monthly installments.Option B: A fixed-rate mortgage at an interest rate of 2.25%/year compounded monthly, payable over a 12-year period in 144 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. Option A Option B (b) How much interest would the Martinezes save if they chose the 12-year mortgage instead of the 30-year mortgage?
The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $150,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 5.5%/year compounded monthly, payable over a 25-year period in 300 equal monthly installments. Option B: A fixed-rate mortgage at an interest rate of 5.25%/year compounded monthly, payable over a 15-year period in 180 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A $ option B $ (b) How much interest would the Martinezes save if they chose the 15-year mortgage instead of the 25-year mortgage? $
The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $150,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 4.5 % / year compounded monthly, payable over a 25-year period in 300 equal monthly installments. Option B: A fixed - rate mortgage at an interest rate of 4.25 % / year compounded monthly, payable over a 12 - year period in 144 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A $option B $ (b) How much interest would the Martinezes save if they chose the 12 - year mortgage instead of the 25 - year mortgage? $
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