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Ms. Towne is buying a home for $250,000 and is putting down 20% cash on the...

Ms. Towne is buying a home for $250,000 and is putting down 20% cash on the purchase. She is financing the rest with a 30-year, fixed rate mortgage with a rate of 4.625% but is considering an option that would allow her to make biweekly payments. How much interest would the biweekly payment option allow her to save over the life of the loan and how long would it take to pay off the loan?

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Answer #1
Loan amount 200000
Term of loan 30 years
Rate 4.625%
Total interest under monthly payments 170180.5
Total interest under biweekly payments 170003.3
Savings 177.1246
Time to pay the loan will remain the same if payments do not change   30 years   

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