You Take a Fixed-Rate Mortgage for $130,000 at 6

question 8

Multiple Choice

You take a fixed-rate mortgage for $130,000 at 6.75% for 30 years,monthly payments.At the end of year two,you unexpectedly inherit $15,000 from your now-favorite grandmother.You decide to apply this $15,000 to the principal balance of your loan.How much interest do you save over the life of the loan by doing this assuming that the mortgage is held to maturity?

• A) $76,089
• B) $96,325
• C) $61,089
• D) $79,637
• E) none of the above

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