David takes out a loan for $175,000 to buy a new house. He is financing it at 4.20% for 20 years.
1. What will be his monthly payment?
2. What will be the total that David (previous problem) will pay over the life of the loan? How much of that will be interest?
3. Recalculate David’s loan payment from the previous problem if he decides to pay his loan back over 30 years, instead of 20.
4. What will be David’s total of all payments and total interest paid over the life of the loan if he chooses the 30-year mortgage?