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# You plan to purchase a $280,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 7.10 percent, or

You plan to purchase a $280,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 7.10 percent, or a 15-year mortgage with a rate of 6.20 percent. You will make a down payment of 25 percent of the purchase price.

**a.** Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid? **b.** Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?

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