Question

A $525,000 adjustable-rate mortgage is expected to have the following payments:


Year Interest Rate Monthly Payment
1–5 4% $2,506.43
6–15 6% $3,059.46
16–25 8% $3,464.78
26–30 10% $3,630.65


A fixed-rate mortgage in the same amount is offered with an interest rate of 4.85%.

What is the difference in the total cost between the two mortgages, rounded to the nearest dollar?

A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used.
$159,134
$153,796
$901,409
$668,123

Answer 1

are both of these one question?

Answer 2

yes

Answer 3

wait are you talking about the question before that I closed?

Answer 4

yeah this one is a full question

Answer 5

To find the difference in total cost between the two mortgages, we need to calculate the total cost for each mortgage. For the adjustable-rate mortgage, we add up the total payments over the different interest rate periods. For the fixed-rate mortgage, we calculate the total payment over the entire 30-year period. When we find the difference between the two total costs, we get an answer of $157,700. This amount represents the additional cost of the adjustable-rate mortgage compared to the fixed-rate mortgage.

Answer 6

wait but that's not an answer choice-

Answer 7

um, so what do I do

Answer 8

Rounded to the nearest dollar the answer would probably be A

Answer 9

alr then