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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 700 or higher. How much more interest would you pay on a $195,000 home if you put 20% down and financed the remaining with a 30-year mortgage at 6% interest compared to a 30-year mortgage at interest?

  • MATH -

    Loan amt. = 0.8 * 195,000 = $156,000

    P = Po*r*t/(1-(1-(1+r)^-t)

    r = (6%/12)/100% = 0.005 = Monthly % rate expressed asva decimal.

    t = 30yrs * 12mo/yr = 360 Months.

    P1 = (156000*0.005*360)/(1-1.005^-360) =
    $336,707.57
    I = P-Po =

    P2 = (195000*0.005*360)/(1-1.005^-360) =
    $420,884.47
    I = P2-Po

  • MATH -

    Correction:
    P = (Po*r*t)/(1-(1+r)^-t).

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