A Loan Officer States, "Thousands of Dollars Can Be Saved

question 87

Multiple Choice

A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage from a 30-year mortgage." Calculate the difference in payments on a 30-year mortgage at 9% interest versus a 15-year mortgage with 8.5% interest.Both mortgages are for $100,000 and have monthly payments.What is the difference in total dollars that will be paid to the lender under each loan? (Round the monthly payment amounts to 2 decimal places.Both interest rates are compounded monthly.)

• A)$89,211
• B)$98,406
• C)$112,410
• D)$124,300

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Currency

A system of money in general use in a particular country or economic context.

Real Exchange Rate

The value of a currency in terms of another currency, adjusted for differences in price levels between countries.

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The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners, which reflects the flow of capital out of a country.

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