Pre-Class Assignment 4D


Read through section 4D in your book and answer the following questions.


  • Write down the Loan Formula here and list what all of the variables stand for.












  • What is the difference between a principal payment and an interest payment?









  • Which do you think is a more important factor when taking out a loan: monthly payments or total interest paid? Explain your answer.








  • Look at the chart in the middle of page 253, outlining the 2 different payment options (30 yr or 15 yr) for a $100,000 mortgage.
  1. Which has higher monthly payments?



  1. Which one ultimately pays more money to the bank?



  1. Do the answers to a and b conflict or make sense? Explain your answer.

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