Clair Walsh wishes to purchase a(n) $630,000 house. She has accumulated a $110,000 down payment, but she wishes to borrow $520,000 on a 25-year mortgage. For simplicity, assume annual mortgage payments occur at the end of each year and there are no loan fees.
1. |
What are Walsh's annual payments if her interest rate is (a) 4%, (b) 6%, and (c) 10%, compounded annually? |
2. |
Repeat number 1 for a 20-year mortgage. |
3. |
Suppose Walsh had to choose between a 25-year and a 20-year mortgage, either one at a(n) 6% interest rate. Compute the total payments and total interest paid on (a) a 25-year mortgage and (b) a 20-year mortgage. |
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Clair Walsh wishes to purchase a(n) $630,000 house. She has accumulated a $110,000 down payment...
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