You have decided to purchase a house for $225,000 and are evaluating your options for mortgage. Assume that your downpayment will be 20% of the purchase price, payments will be made monthly, and the first payment will be made one month from today.
a. What is the mortage amount?
b. If you select the 30-year mortgage, the interest will be 4.50% annually. what is the montly payment?
c. Suppose the bank is also offering a 15-year mortage at 4.25% annually. what is the montly payment on this mortgage?
d. What is the total of all payments for each mortgage? which one costs you the least over the life of the mortgage?