Which bank loan will result in the smallest monthly payment

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Reference no: EM132178122

Question - You have just contracted to purchase a house and will seek $100,000 in financing. You go to several banks with the following results:

Bank	Amount of Loan	Interest Rate	Length of Loan	Origination Fee
#1	$100,000	5.078%	30 years	1.75%
#2	$100,000	4.310%	15 years	1.50%
#3	$100,000	5.199%	30 years	Zero
#4	$100,000	4.840%	15 years	zero

a) Which bank's loan will result in the smallest monthly payment? Show all work neatly below and use extra sheets if necessary. Be sure to clearly mark your final answer.

b) Which bank's loan will result in the least amount of interest paid? Show all work neatly below and use extra sheets if necessary. Be sure to clearly mark your final answer.

c) Give sound reasons for which loan you, personally, would take (answers may vary, so scoring on this part is based on the quality of your individual reasoning).

Reference no: EM132178122

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