Question

Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 740 or higher. How much more interest would you pay on a $186,000 home if you put 25% down and financed the remaining with a 30-year mortgage at 5% interest compared to a 30-year mortgage at 3.5% interest? (Do not round Intermediate calculations. Round your answer to the nearest cent.) Excess interest

Answer 1

30 Year 5%
Loan amount	139500
Total interest	130091.82
30 Year 3.5%
Loan amount	186000
Total interest	114680.32
Excess interest	15411.50

Workings

AutoSave © of HO- Book1 - Excel Sign in - o X File Home Insert Draw Page Layout Formulas Data Review View Help O Tell me what you want to do Share Comments = = open alle Calibri BI U - 11 - - A À = - A - E General $ - % Insert Delete - Format 2' AZ O T- Sort & Find & Filter - Select Paste - Conditional Format as Formatting Table Cell Styles Clipboard Font Alignment Number Styles Cells Editing 011 | x fix м. - N 30 Year 5% Loan amount Total interest =186000*(1-25%) =-CUMIPMT(5%/12,30*12,02,1,360,0) O = 0 30 Year 3.5% Loan amount Total interest o 186000 =-CUMIPMT(3.5%/12,30*12,06,1,360,0) C Additional interest =03-07 11 12 13 14 15 16