### 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

You pay in interest.

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

You pay in interest.

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

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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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```  ______   __   __             __   __    _  _
/_   _//  \ \\/ //   ____     \ \\/ //  | \| ||
| ||     \ ` //   |    \\    \ ` //   |  ' ||
_| ||      | ||    | [] ||     | ||    | .  ||
/__//       |_||    |  __//     |_||    |_|\_||
`--`        `-`'    |_|`-`      `-`'    `-` -`
`-`
```
• 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

You pay in interest.

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

You pay in interest.

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

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.

```__    __     ___       _____     ___      _  __
\ \\ / //   / _ \\    / ___//   / _ \\   | |/ //
\ \/ //   | / \ ||   \___ \\  / //\ \\  | ' //
\  //    | \_/ ||   /    // |  ___  || | . \\
\//      \___//   /____//  |_||  |_|| |_|\_\\
`       `---`   `-----`   `-`   `-`  `-` --`

```
• 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%

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.

```  _____      ___       _____     ___     __   __
/  ___||   / _ \\    / ___//   / _ \\   \ \\/ //
| // __    | / \ ||   \___ \\  / //\ \\   \   //
| \\_\ ||  | \_/ ||   /    // |  ___  ||  / . \\
\____//    \___//   /____//  |_||  |_|| /_//\_\\
`---`     `---`   `-----`   `-`   `-`  `-`  --`

```
• 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

You pay in interest.

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

You pay in interest.

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

You pay in interest.

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.

```           _    _     ______   __   __    _  __
____    | || | ||  /_   _//  \ \\/ //  | |/ //
|    \\  | || | ||  `-| |,-    \ ` //   | ' //
| [] ||  | \\_/ ||    | ||      | ||    | . \\
|  __//   \____//     |_||      |_||    |_|\_\\
|_|`-`     `---`      `-`'      `-`'    `-` --`
`-`
```
• 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

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```  ______    _____    _    _      ___      _____