Solve the Problem $8 \%$ Option 2: a 15-Year Loan at an APR Of

question 177

Multiple Choice

Solve the problem.
-Suppose that you need a loan of $120,000. Find the total cost of all the monthly payments for each of the loan options listed below. Assume that the loans are fixed rate. Round the total cost of each
Loan to the nearest dollar. Option 1: a 30-year loan at an APR of $8 \%$
Option 2: a 15-year loan at an APR of $7 \%$

• A) Option 1: \(\$ 309,981\)
• Option 2: \(\$ 187,135\)
• B) Option 1: \(\$ 316,987\)
• Option 2: \(\$ 194,146\)
• C) Option 1: \(\$ 245,608\)
• Option 2: \(\$ 186,056\)
• D) Option 1: \(\$ 321,909\)
• Option 2: \(\$ 198,185\)

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Definitions:

Substantial Impairment

A significant reduction in the ability or capacity of something, often used in legal contexts regarding the impairment of physical or mental functions.

Perfect Tender Rule

A principle in the sale of goods law that allows buyers to reject goods if they do not exactly meet the terms of the contract.

Substantial Perform

This refers to a situation in contract law where a party has completed enough of their contractual obligations that they are considered to have fulfilled the contract, despite minor issues or incomplete details.

Right to Cure

The legal opportunity given to a defaulting party to correct or remedy their failure or breach within a specified time frame before further legal action is taken.