Question

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to determine the regular payment​ amount, rounded to the nearest dollar. In terms of paying less in​ interest, which is more economical for a ​$260,000 ​mortgage: a​ 30-year fixed-rate at 9​% or a​ 20-year fixed-rate at 8.5​%? How much is saved in​ interest?
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Part 1
Select the correct choice below and fill in the answer box within your choice.
​(Do not round until the final answer. Then round to the nearest thousand​ dollars.)
A.
The​ 20-year 8.5​% loan is more economical. The buyer will save approximately ​$
  
enter your response here in interest.  
B.
The​ 30-year 9​% loan is more economical. The buyer will save approximately ​$
  
enter your response here in interest.

Answer 1

A. The 20-year 8.5% loan is more economical.

Monthly payments (rounded to the nearest dollar):
- 30‑year at 9%: $2,093
- 20‑year at 8.5%: $2,257

Total interest paid (rounded to nearest dollar):
- 30‑year: ≈ $493,479
- 20‑year: ≈ $281,793

Interest saved by choosing the 20‑year 8.5% loan ≈ $212,000 (rounded to the nearest thousand).