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.
- Which has higher monthly payments?
- Which one ultimately pays more money to the bank?
- Do the answers to a and b conflict or make sense? Explain your answer.