5. Erin borrowed $200,000 fixed-rate 30-yr mortgage when mortgage rate was 4.5%. How much total interest will she pay if she does not pay off the mortgage earlier? She heard that some house buyers choose to make one extra monthly payment each year so as to pay off their mortgage earlier and therefore reduce the interest payment. Erin decided to do so too. Each year, she will split the extra payment to 12 month so that she pays $1098 per month all the way until paying off the mortgage. Doing so will pay off her mortgage within 307 months instead of 30 years. How much interest will she save? If you were Erin and have extra money, are you financially better off by making extra monthly payment and paying off your mortgage earlier |
5. Erin borrowed $200,000 fixed-rate 30-yr mortgage when mortgage rate was 4.5%. How much total interest will she pay if she does not pay off the mortgage earlier? She heard that some house buyers choose to make one extra monthly payment each year so as to pay off their mortgage earlier and therefore reduce the interest payment. Erin decided to do so too. Each year, she will split the extra payment to 12 month so that she pays $1098 per month all the way until paying off the mortgage. Doing so will pay off her mortgage within 307 months instead of 30 years. How much interest will she save? If you were Erin and have extra money, are you financially better off by making extra monthly payment and paying off your mortgage earlier |
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 5E
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