A mortgage banking company has been evaluating the merits of a 50-year mortgage (in addition to their

Question:

A mortgage banking company has been evaluating the merits of a 50-year mortgage (in addition to their popular 30-year mortgage). The basic idea is to reduce the monthly payment and make home ownership more affordable. The APR of either mortgage is 6% and the is monthly.
a. For a mortgage loan of $300,000, what is the difference in monthly payment for the 30-year mortgage and the 50-year mortgage?
b. What is the difference in total interest paid between the two mortgages?
Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...