Decided to purchase house

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John Cardinals has decided to purchase a house in Moncks Corner, SC. The price of the house is $ 80000 after a down payment of $ 20000. The Bank of America will finance the purchase for 25 years at 9%. Alternatively, it will finance the house for 15 years at 8%. Under either option, the bank wants John to retire the loan by making a series of equal-sized year end payments. Evaluate the options for John. Explain to Mr. Cardinals how much total interest he will pay under each option and how much his total payment will be each year and over the life of the loan. Advise about which choice he should take and the factors that are important in making the decision

Reference no: EM131162934

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