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moreeestylero mer uger once she transitions 16 2. Kathy plans to move to Maryland and take a job at McCormick as the assistan

please answer this based off of a 4% Apr

2 Budgeted price = $500,000 Down payment = $100,000 Loan amount (PV)= $500,000-100,000= Rate-30yr mortgage per month rate = 4

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Answer #1

2. Budgeted price is 500000 and down payment=100000

Loan amount(PV)=500000-100000=400000, Tenure=30*12=360, Rate=4.5%/12=0.375%,PMT=?

А В C D 1 Rate 0.375% 400000 360 ЕРМТ(В1, В3, В2,0,.0) 2 PV 3 nper 4 PMT PMT(rate, nper, pv, [fv], [type]) 5 6 7 LO

А В 1 Rate 2 PV 0.375% 400000 3 nper 360 4 PMT ($2,026.74) Ln

Monthly installment and taxes, insurance=2026.74+1000=3026.74

Total additional payment on principal of $400000=3026.74*360-400000=689626.4

For the second scenario:

nper=15*12=180, monthly rate=4%/12=0.33%, PV=400000, PMT=?

D E F G 0.33% Rate 400000 180 =PMT(E1,E3,E2,0,0) PMT(rate, nper, pv, [fv], [type]) PV nper PMT

D E Rate 0.33% PV 400000 180 nper ($2,958.75) РMT

Hence, total monthly payment=2958.75+1000=$3958.75

Total additional payment=3958.75*180-400000=312575

As the total additional interest payment is lesser for second scenario, they should chose 15 year 4% mortgage loan.

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