Question: Based on the information below, which is the better loan for a borrower? 15-year or 30-year mortgage? Will your answer be different if the

Based on the information below, which is the better loan for a

Based on the information below, which is the better loan for a borrower? 15-year or 30-year mortgage? Will your answer be different if the borrower has large credit card balances at a 12% interest rate? Explain and show your calculations if necessary. Loan A: Loan amount: $250,000 at 6% annual rate with monthly amortization, maturity: 15 years Loan B: Loan amount: $250,000 at 6% annual rate with monthly amortization, maturity: 30 years

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To determine which loan is better lets compare Loan A 15year mortgage and Loan B 30year mortgage bas... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...

1. What factors should Brad consider in selecting a financial institution 2. If Brads stock doubles in value over the next five years, what annual return, compounded monthly, would he realize? Based...

Brad MacDonald is pleased with your assistance in preparing his personal financial statements and your suggestions for improving his personal financial situation. He has called on you for additional...

In 1998, the Department of the Interior began an incentive plan for oil companies that permitted the companies to waive the $12.5 \%$ royalty generally paid to the U.S. government for oil leases on...

Albertsen Corporation is a diversified company with nationwide interests in commercial real estate developments, banking, copper mining, and metal fabrication. The company has offices and operating...

LaRocca Company sells its product for $20 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...

Connick Company sells its product for $22 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...

You have just been hired as a loan officer for Washington Mutual Savings. Selig Equipment and Mountain Bike Inc. have both applied for $125.000 nine-month loans to acquire additional plant equipment....

Ramey Corporation is a diversified public company with nationwide interests in commercial real estate development, banking, copper mining, and metal fabrication. The company has offices and operating...

Tony has owned an oil and gas property for a number of years. The following information is provided about the propertys operations in the current year: Gross income .$500,000 Minus: Expenses...

Given the following data and c =2, perform the indicated summations. Y Subject (0) X 1 2 3 4 5 60431 85328 6 a. EX + c b. c. (X+c) X+Y) d. ScX+ e. (XY)+c f. (XY + c)

A magnetic field forces an electron to move in a circle with radial acceleration 3.0 ( 1014 m/s2. (a) What is the speed of the electron if the radius of its circular path is 15 cm? (b)What is the...

In November 2 0 1 8 , The Guardian reported that prosecutors in two states are considering filing criminal charges against company executives over the way OxyContin has " - allegedly been dangerously...

A cone with base radius R and height h is located on a horizontal table. A horizontal uniform field E penetrates the cone, as shown in Figure P24.8. Determine the electric flux that enters the...

On a clear, sunny day, a vertical electric field of about 130 N/C points down over flat ground. What is the surface charge density on the ground for these conditions?

(a) If a drop of liquid has capacitance 1.00 pF, what is its radius? (b) If another drop has radius 2.00 mm, what is its capacitance? (c) What is the charge on the smaller drop if its potential is...

Evaluate the equivalent capacitance of the configuration shown in Figure P26.18. All the capacitors are identical, and each has capacitance C. C C C

A resistor is constructed of a carbon rod that has a uniform cross-sectional area of 5.00 mm2. When a potential difference of 15.0 V is applied across the ends of the rod, the rod carries a current...

Choose the incorrect statement regarding maintenance and overhaul procedures for total project planning.a.Deficient planning/scheduling/fault diagnosis can be the cause of serious accidents in...

What are the basic segment reporting requirements under US GAAP, and would you say they favor those stakeholders who prefer more or who prefer less disclosure? Reference: Please use Segment reporting...

Hello, having trouble putting my PROJECT 1 assignment together and need assistance with creating an outline. I have attached the PROJECT 1 assignement and another document for this inquiry. Thanks...

Summarize the evolution of cost processing in Greece from 1985-2015. Your response must be at least 400 words in length. The evolution of costing during the period 1985-2015: Progress or inactivity?...

2) Company X and Company Y are in the same industry and have the following ratios. Discuss the relative natures of the two companies in terms of risk and retum. Identify the more growth-oriented firm...

Hello, having trouble putting my PROJECT 1 assignment together and need assistance with creating an outline. I have attached the PROJECT 1 assignement and another document for this inquiry. Thanks...

Please read carefully, all necessary information is attached, need to show work let me know if there is something missing. Microsoft word can be used thanks. You are Cindy, completing the analysis...