Finance
A Texas borrower is considering a 15-year mortgage versus a 30-year mortgage at the same interest rate. Which statement is TRUE?
AThe 15-year loan has a lower monthly payment
BThe 30-year loan results in less total interest paid
CThe 15-year loan results in significantly less total interest paid✓ Correct
DBoth loans have identical total costs if the rate is the same
Explanation
A 15-year mortgage has a higher monthly payment than a 30-year mortgage, but results in significantly less total interest paid because the loan is repaid twice as fast and the balance decreases much more quickly.
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