Your current $155,000 mortgage calls for monthly payments over 25 years at an annual interest rate of 6 percent. If you pay an additional $50 each month beginning with the first payment, how much interest expense do you save by pre-paying?
A) $15,981.28
B) $16,009.62
C) $17,152.22
D) $19,001.69

Question

Quizplus · Accepted Answer

By paying an additional $50 each month, you reduce the principal faster, which decreases the total interest paid over the life of the loan. The correct calculation shows a savings of $17,152.22 in interest.

Your Current $155,000 Mortgage Calls for Monthly Payments Over 25