For a $72 000 mortgage at 9 percent, the monthly payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage. What amount would be closest to the expected total savings in interest by using a 15-year mortgage?

Question

Quizplus · Accepted Answer

To find the expected total savings in interest, we need to subtract the total amount paid with a 15-year mortgage from the total amount paid with a 30-year mortgage.

For the 15-year mortgage, the total amount paid over 15 years is:

$730/month x 12 months/year x 15 years = $131,400

For the 30-year mortgage, the total amount paid over 30 years is:

$579/month x 12 months/year x 30 years = $208,440

The difference between these two totals is:

$208,440 - $131,400 = $77,040

Therefore, the expected total savings in interest by using a 15-year mortgage is closest to $77,040. So, the best choice is (C).

For a $72 000 Mortgage at 9 Percent, the Monthly