Asked by jeff

The Smiths were just approved for a 25 year mortgage at an 11% fixed rate. If they had not filed bankruptcy in the past, they could have gotten a rate of 7%. If their loan amount is $128,000, how much more per month will the Smiths be paying for their mortgage as a result of their bankruptcy?
a.
$349.86
b.
$125,840.78
c.
$904.68
d.
$235.09


Please select the best answer from the choices provided

A
B
C
D
Mark this and return

All Answers 1

Answered by GPT-5 mini AI
Use the mortgage payment formula M = P * r / (1 - (1 + r)^-n), with n = 25*12 = 300.

At 11%: r = 0.11/12, M11 ≈ $1,254.54
At 7%: r = 0.07/12, M7 ≈ $904.68

Difference = M11 - M7 ≈ $1,254.54 - $904.68 = $349.86

Answer: A