algebra
posted by tracy .
The price of a small cabin is $85000 the bank requires a 5% down payment the buyer is offered two mortgage options: 20 year fixed at 9.5% or 30 year fixed at 9.5% calculate the amount of interest paid for each option how much does the buyer save in interest with the 20 year option

Deposit 5% = 5%X$85000 = $4250
Amount left = $85000  $4250 = $80750
One year interest = 9.5% X $80750 = 7671.25
20 years interest = $153425
30 years interest= $230137.50
Saving is $76712.5 
Sorry Many, but there two major flaws with your answer.
1. You are using simple interest, but mortgages are based on compound interest
2. You can't just multiply the first year's interest times 20 and 30. Are there no payments made? If payments are made then the annual interest paid would be decreasing.
The question requires much more complicated arithmetic. You would first of all find the monthly payments for each of the options and go from there.
Tracy, at what level of mathematics are you studying this? 
the price of a small cabin $85000 the bank requires a 5% down payment the buyer is offered two mortgage option 20year fixed at 10% or 30year fixed at 10% calculate the amount of interest paid for each option. how much does the buyer save in interest with the 20 year option?
Respond to this Question
Similar Questions

math
The price of a home is $120,000. The bank requires a 10% down payment and two points of closing. The cost of the home is financed with 30year fixedrate mortgage at 8.5%. Find the total cost of interest over 30 years. 
math
Determine the regular payment amount, rounded to the nearest dollar. The price of a home is $160,000. the bank requires a 15% down payment. The buyer is offered two mortgage options: 1 year fixed at 8% or 30year fixed at 8%. Calculate … 
math
Determine the regular payment amount, rounded to the nearest dollar. The price of a home is $160,000. the bank requires a 15% down payment. The buyer is offered two mortgage options: 1 year fixed at 8% or 30year fixed at 8%. Calculate … 
math
Determine the regular payment amount, rounded to the nearest dollar. The price of a home is $160,000. the bank requires a 15% down payment. The buyer is offered two mortgage options: 1 year fixed at 8% or 30year fixed at 8%. Calculate … 
Math
The price of a small cabin is $40,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20year fixed at 8.5% or 30year fixed at 8.5 %. Calculate the amount of interest paid for each option. How much … 
Urgent math
A couple needs a mortgage of $300,000. Their mortgage broker presents them with two options: a 30year mortgage at 8 1/2% interest or a 15year mortgage at 7 3/4% interest. (Round your answers to the nearest cent.) (a) Find the monthly … 
math
The price of a small cabin is $35,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20year fixed at 7.5% or 30year fixed at 7.5%. Calculate the amount of interest paid for each option. How much … 
math
The price of a small cabin is $55,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20year fixed at 7.5% or 30year fixed at 7.5%. Calculate the amount of interest paid for each option. How much … 
Math
The price of a small cabin is $45,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20year fixed at 6.56.5% or 30year fixed at 6.56.5%. Calculate the amount … 
math 118
The price of a small cabin is $30,000. The bank requires a 5% down payment. The buyer is offered two mortgage options: 20year fixed at 10% or 30year fixed at 10%. Calculate the amount of interest paid for each option. …