Jamal took out a $75,000 mortgage loan and is offered two payment options.
Option 1: Repay the loan in 30 years with a 6.4% annual interest rate, compounded monthly.
Option 2: Repay the loan in 15 years with a 5.2% annual interest rate, compounded monthly.
Using an online loan calculator, determine which payment option Jamal should select if he can only afford a maximum of $550 per month for this mortgage loan. What is the total amount of interest Juan will end up paying with his affordable option?
(1 point)
Responses
The affordable payment option for Jamal is payment option 1. The total amount of interest Juan has to pay for this option is $93,886.60.
The affordable payment option for Jamal is payment option 1. The total amount of interest Juan has to pay for this option is $93,886.60.
The affordable payment option for Jamal is payment option 2. The total amount of interest Juan has to pay for this option is $33,168.90.
The affordable payment option for Jamal is payment option 2. The total amount of interest Juan has to pay for this option is $33,168.90.
The affordable payment option for Jamal is payment option 1. The total amount of interest Juan has to pay for this option is $33,168.90.
The affordable payment option for Jamal is payment option 1. The total amount of interest Juan has to pay for this option is $33,168.90.
The affordable payment option for Jamal is payment option 2. The total amount of interest Juan has to pay for this option is $108,168.90.
The correct response is:
The affordable payment option for Jamal is payment option 2. The total amount of interest Jamal will end up paying with this option is $33,168.90.