You are considering the purchase of a home that would require a mortgage of $150,000.How much more in total interest will you pay if you select a 30-year mortgage at 5.65% rather than a 15-year mortgage at 4.9%? (Round the monthly payment amount to 2 decimal places.)
A) $86,311.18
B) $78,487.92
C) $99,595.80
D) $102,486.68

Question

Quizplus · Accepted Answer

$150,000 = PMT([1 / (0.0565 / 12)] − 1 / {(0.0565 / 12)[1 + (0.0565 / 12)]^{30 × 12}})PMT = $865.85$150,000 = PMT([1 / (0.049 / 12)] − 1 / {(0.049 / 12)[1 + (0.049 / 12)]^{15 × 12}})PMT = $1,178.39Total difference = ($865.85 ×12 × 30) − ($1,178.39 × 12 × 15) = $99,595.80

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