The price of a home is 240,000. the bank requires a 15% down payment. The buyer is offered two options: 15 year fixed at 7% or 30 yer fixed at 7.5%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15 yr. plan?

(round to the nearest dollar as needed)

240,000 x .0.075 = 18,000 /30 yrs = 600 / 12 months = 50 per month

240,000 x .0.07 = 16,800 /15 yrs = 1120 /12 months = $93 per month

Find the monthly payment for the 30 year option_____50 per month

(round to the nearest dollar as needed)

Calculate the total cost of interest for both mortgage options. How much does the buyer save in interest with the 15 yr plan?_____

18000 - 16800 = $1200