The Adamson household is considering paying off a $350,000 mortgage with either monthly payments over 25 years, or weekly payments made at the start of each week over a 25 years. If interest is 7.2% compounded semi-annually, determine how much interest would be saved with the weekly payments made at the beginning of the week.

Question

Quizplus · Accepted Answer

The correct answer is A. The weekly payments made at the beginning of the week will save $1,695.93 in interest compared to the monthly payments made over 25 years. This is because the weekly payments are made more frequently, which means that the interest is compounded more often. As a result, the total amount of interest paid over the life of the loan is reduced.

The Adamson Household Is Considering Paying Off a $350,000 Mortgage