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6.3 Home Mortgages

6.3 Home Mortgages
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  • 1. Mortgage Rates

    You take out a home mortgage. Compare the total interest you pay for the annual percentage rates. (See Example 1.)

    Home mortgage: $140,000 for 30 years

    1. 5%
    1. 7%
    • Worked-Out Solution
      1. For a principal of $140,000 for 30 years at 5% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

      2. For a principal of $140,000 for 30 years at 7% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

        So, an increase of only 2 percentage points increases the interest that you pay by

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      _____     ______    ______   _    _     ____    
     |__  //   /_   _//  /_____// | || | ||  |  _ \\  
       / //     -| ||-   `____ `  | || | ||  | |_| || 
      / //__    _| ||_   /___//   | \\_/ ||  | .  //  
     /_____||  /_____//  `__ `     \____//   |_|\_\\  
     `-----`   `-----`   /_//       `---`    `-` --`  
                         `-`                          
    
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  • 2. Mortgage Rates

    You take out a home mortgage. Compare the total interest you pay for the annual percentage rates. (See Example 1.)

    Home mortgage: $165,000 for 30 years

    1. 8%
    1. 10%
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    __    __   __   __    _____     _____    _    _   
    \ \\ / //  \ \\/ //  |__  //   |  ___|| | \  / || 
     \ \/ //    \ ` //     / //    | ||__   |  \/  || 
      \  //      | ||     / //__   | ||__   | .  . || 
       \//       |_||    /_____||  |_____|| |_|\/|_|| 
        `        `-`'    `-----`   `-----`  `-`  `-`  
                                                      
    
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  • 3. Mortgage Rates

    You take out a home mortgage. Compare the total interest you pay for the annual percentage rates. (See Example 1.)

    Home mortgage: $220,000 for 30 years

    1. 4%
    1. 6%
    • Worked-Out Solution
      1. For a principal of $220,000 for 30 years at 4% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

      2. For a principal of $220,000 for 30 years at 6% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

        So, an increase of only 2 percentage points increases the interest that you pay by

    Comments (0)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
    When posting a comment, you agree to our Terms of Use.

     _    _      ___     __   _     ______   _    _   
    | \  / ||   / _ \\  | || | ||  /_   _// | |  | || 
    |  \/  ||  | / \ || | '--' ||   -| ||-  | |/\| || 
    | .  . ||  | \_/ || | .--. ||   _| ||_  |  /\  || 
    |_|\/|_||   \___//  |_|| |_||  /_____// |_// \_|| 
    `-`  `-`    `---`   `-`  `-`   `-----`  `-`   `-` 
                                                      
    
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  • 4. Mortgage Rates

    You take out a home mortgage. Compare the total interest you pay for the annual percentage rates. (See Example 1.)

    Home mortgage: $275,000 for 30 years

    1. 6%
    1. 8%
    Comments (0)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
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                 ___     _____       ___     _____    
        ___     / _ \\  |  __ \\    / _ \\  |  __ \\  
       /   ||  / //\ \\ | |  \ ||  / //\ \\ | |  \ || 
      | [] || |  ___  ||| |__/ || |  ___  ||| |__/ || 
       \__ || |_||  |_|||_____//  |_||  |_|||_____//  
        -|_|| `-`   `-`  -----`   `-`   `-`  -----`   
         `-`                                          
    
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  • 5. Mortgage Terms

    You take out a home mortgage. Compare the total interest you pay for the terms. (See Example 2.)

    Home mortgage: $200,000 at 5%

    1. 20 years
    1. 30 years
    1. 40 years
    • Worked-Out Solution
      1. For a principal of $200,000 for 20 years at 5% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

      2. For a principal of $200,000 for 30 years at 5% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

      3. For a principal of $200,000 for 40 years at 5% annual percentage rate, the monthly payment is

        Your payments total

        You pay in interest.

    Comments (0)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
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       _____    ______               ___      ______  
      / ___//  /_   _//   ____      / _ \\   /_____// 
      \___ \\   -| ||-   |    \\   / //\ \\  `____ `  
      /    //   _| ||_   | [] ||  |  ___  || /___//   
     /____//   /_____//  |  __//  |_||  |_|| `__ `    
    `-----`    `-----`   |_|`-`   `-`   `-`  /_//     
                         `-`                 `-`      
    
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  • 6. Mortgage Terms

    You take out a home mortgage. Compare the total interest you pay for the terms. (See Example 2.)

    Home mortgage: $180,000 at 6%

    1. 15 years
    1. 25 years
    1. 30 years
    Comments (0)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
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     ______      ___      _____    _    _     _  __  
    |      \\   / _ \\   /  ___|| | || | ||  | |/ // 
    |  --  //  | / \ || | // __   | || | ||  | ' //  
    |  --  \\  | \_/ || | \\_\ || | \\_/ ||  | . \\  
    |______//   \___//   \____//   \____//   |_|\_\\ 
    `------`    `---`     `---`     `---`    `-` --` 
                                                     
    
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