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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.
    When posting a comment, you agree to our Terms of Use.

                 ___      _____      ___     _____    
      ____      / _ \\   / ____||   / _ \\  |  __ \\  
     |    \\   / //\ \\ / //---`'  / //\ \\ | |  \ || 
     | [] ||  |  ___  ||\ \\___   |  ___  ||| |__/ || 
     |  __//  |_||  |_|| \_____|| |_||  |_|||_____//  
     |_|`-`   `-`   `-`   `----`  `-`   `-`  -----`   
     `-`                                              
    
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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)

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      ______     ___     _____       ___      ______  
     /_   _//   / _ \\  |  __ \\    / _ \\   /_____// 
     `-| |,-   / //\ \\ | |  \ ||  / //\ \\  `____ `  
       | ||   |  ___  ||| |__/ || |  ___  || /___//   
       |_||   |_||  |_|||_____//  |_||  |_|| `__ `    
       `-`'   `-`   `-`  -----`   `-`   `-`  /_//     
                                             `-`      
    
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