Question

A $100,000 loan at 6% could be amortized with monthly payments of $843.86 on a 15-year basis or payments of $599.55 on a 30-year basis. The 30-year loan results in total payments of what percentage of the 15-year total payments

Answer 1

Answer:

142.1%

Explanation:

the total payments needed to pay off the 30 year loan = 30 years x 12 months x $599.55 = $215,838

the total payments needed to pay off the 15 year loan = 15 years x 12 months x $843.86 = $151,894.80

the relationship between total payments = $215,838 / $151,894.80 = 1.421 = 142.1%