Compare the monthly payments and total loan costs for thefollowing pairs of loan options. Assume that both loans are fixedrate and have the same closing costs.
You need a ​$110,000 loan.
Option​ 1: a​ 30-year loan at an APR of 7.25​%.
Option​ 2: a​ 15-year loan at an APR of 6.8%.
1.) Find the monthly payment for each option.
The monthly payment for option 1 is what?
The monthly payment for option 2 is​what?.
​(Do not round until the final answer. Then round to the nearestcent as​ needed.)
2.) Find the total payment for each option.
The total payment for option 1 iswhat?
The total payment for option 2 iswhat?
​(Round to the nearest cent as​ needed.)
Compare the two options. Which appears to be thebetter​ option?
A.Option 2 is the better​ option, but only if the borrower canafford the higher monthly payments over the entire term of theloan.
B.Option 1 will always be the better option.
C.Option 1 is the better​ option, but only if the borrower plansto stay in the same home for the entire term of the loan.
D.Option 2 will always be the better option
