(Mortgage Loans MC)

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 4.65%.

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.
$176,580
$878,626
$158,184
$394,911

Question

(Mortgage Loans MC)

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 4.65%.

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.
 $176,580
 $878,626
 $158,184
 $394,911

blackj8882 · Answer

a