In Exercises 1-10, use

P M T = P ( r n ) [ 1 − ( 1 + r n ) − n t ]

to determine the regular payment amount, rounded to the nearest dollar.

In Exercises 7-8, which mortgage loan has the greater total cost (closing cost + the amount paid for points + total cost of interest)? By how much?

A $120,000 mortgage with two loan options:

Mortgage A: 30-year fixed at 7% with closing costs of $2000 and one point

Mortgage B: 30-year fixed at 6.5% with closing costs of $1500 and four points