Which of the following options regarding a $200000 mortgage,compounded semi-annually requires the lowest total interest payment?
A)A 4.0 percent interest rate,paid monthly and amortized over 15 years
B)A 3.5 percent interest rate,paid monthly and amortized over 20 years
C)A 3.5 percent interest rate,paid biweekly and amortized over 18 years
D)A 3.25 percent interest rate,paid monthly and amortized over 22 years

Question

Quizplus · Accepted Answer

Option A, with a 4.0 percent interest rate paid monthly and amortized over 15 years, requires the lowest total interest payment. This is because the shorter amortization period significantly reduces the amount of interest paid over the life of the loan, despite a slightly higher interest rate compared to some other options. Shorter loan terms generally result in higher monthly payments but lower total interest costs.

Which of the Following Options Regarding a $200000 Mortgage,compounded Semi-Annually