What rate of interest makes two financing options equivalent

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Reference no: EM131625352

You will want to buy a $ 85, 000 house with $ 17,000 dollars available for an initial deposit. The following initial payment options are being considered

Option # 1 Get a new estander mortgage at a compound APR of 4.5% monthly and a 30-year APR

Option # 2 assume the buyer's old mortgage (which is an FHA loan) at a compound interest of 4% per month for a remaining term of 25 years (for a term of 30 years), with a balance remaining of $ 48,197, equivalent To a $ 253.34 monthly payment.

A second mortgage can be obtained from the remaining balance, $ 19,903, from a credit cooperative at a 6.5% compound monthly and with a pay period of 10 years.

to. Calculate monthly payments for each option for the duration of the mortgage. (Economic engineering)

B. Calculate the total interest payment for each option.

C. What reason of interest makes the two financing options equivalent?

D. Set the chart for each of the three loans and. Calculate the total interest payment for each option.

F. What rate of interest makes the two financing options equivalent

Reference no: EM131625352

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