Which of the two deals will minimize the annual payments

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Reference no: EM131962376

Assume that you have just purchased a $75,000 house. One bank will give you a 9% mortgage with repayment in equal annual installments over 20 years with $15,000 down payment. Another bank wants a 10% rate of interest but will give you a 25-year equal-annual-installment mortgage with a $15,000 down payment. Assuming that you have that $15,000, which of the two deals will minimize the annual payments?

Reference no: EM131962376

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