Question

1. John is purchasing a house for $500,000. He plans to make a down payment of $100,000 and take out a 30-year mortgage for $400,000. If the interest rate on the house is 5.25 per cent per year, how much will his monthly payment be for principal and interest. If the interest rate is the same, how much would his monthly payment for principal and interest be if he took out a 15-year mortgage? Note: Normally, a 15-year mortgage would carry a lower interest rate. The interest rate here is held constant to simplify the problem. How much interest will John save in total with the 15-year mortgage?

          1. John is purchasing a house for $500,000. He plans to make a down payment of $100,000 and take out a 30-year mortgage for $400,000.
If the interest rate on the house is 5.25 per cent per year, how much will his monthly payment be for principal and interest.
If the interest rate is the same, how much would his monthly payment for principal and interest be if he took out a 15-year mortgage? Note: Normally, a 15-year mortgage would carry a lower interest rate. The interest rate here is held constant to simplify the problem.
How much interest will John save in total with the 15-year mortgage?

Added by Abigail V.

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