Mortgage Bankers Association reported the median price of a home sold in the United States in January 2015 was $199,600. Pat Radigan wants to purchase a new home for $305,500. Pat puts 20% down and will finance the remainder of the purchase. Compare the following two mortgage options he has: 10 years at 3.5% or 15 years at 5%. (Use Table 15.1). (Round your intermediate calculations and final answers to the nearest cent.)
a. Calculate Pat’s monthly payment for both the 10 and 15 year mortgage?
Monthly payment for 10 year mortgage $
Monthly payment for 15 year mortgage $
b. Calculate Pat’s total cost of interest for both the 10 and 15 year mortgage?
Total cost of interest for 10 year mortgage $
Total cost of interest for 15 year mortgage $
c. What is the difference in interest paid between 10 and 15 year mortgage?
Difference $