Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and
have the same closing costs.
You need a $110,000 loan.
Option 1: a 30-year loan at an APR of 9%.
Option 2: a 15-year loan at an APR of 8.5%.
...
Find the monthly payment for each option.
The monthly payment for option 1 is $
The monthly payment for option 2 is $
(Do not round until the final answer. Then round to the nearest cent as needed.)
Find the total amount paid for each option.
The total payment for option 1 is $
The total payment for option 2 is $
(Use the answers from the previous step to find this answer. Round to the nearest cent as needed.)
Compare the two options. Which appears to be the better option?
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