Pregunta
Use PMT
to determine the regular payment amount, rounded to the nearest dollar. The price of a
small cabin is
. The bank requires a
down payment. The buyer is offered two mortgage options: 20-year
fixed at
or 30 -year fixed at 10%. Calculate the amount of interest paid for each option. How much does the buyer
save in interest with the 20-year option?
Find the monthly payment for the 20-year option.
(Round to the nearest dollar as needed.)
small cabin is
fixed at
save in interest with the 20-year option?
Find the monthly payment for the 20-year option.
(Round to the nearest dollar as needed.)
Ask by Whittaker Daniel. in the United States
Mar 14,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
The buyer saves $45,000 in interest with the 20-year option. The monthly payment for the 20-year option is $450.
Solución

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Como
The Deep Dive
To determine the monthly payment for the 20-year mortgage option using the PMT formula, we first need to calculate the down payment and mortgage amount.
The price of the cabin is
. The down payment at
is:
The mortgage amount (loan principal) after the down payment is:
For a 20-year fixed mortgage at
(or
), with
(monthly payments), and
:
Calculating the values:
First, calculate
, then:
Calculating
:
Thus,
Rounding to the nearest dollar, the monthly payment is:
To find the total interest paid over the mortgage period, calculate the total payments minus the loan amount:
Now comparing it with the 30-year mortgage option:
Using the same steps for a 30-year mortgage:
Calculate
:
Calculating
gives approximately
:
Rounding gives
.
Finding total interest for the 30-year option:
Finally, the savings in interest with the 20-year option compared to the 30-year option:
In conclusion:
- The monthly payment for the 20-year option is
. - The buyer saves
in interest with the 20-year option.

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