To solve this, let’s calculate the total payments for each loan based on the given monthly payments and loan durations.

Part 1: Monthly Payments

• Option 1 (30-year loan at 5.65% APR): Monthly payment = $173.17 (already given).
• Option 2 (15-year loan at 5.25% APR): Monthly payment = $241.16 (already given).

Part 2: Total Amount Paid for Each Option

The total payment can be calculated using the formula: $\text{Total Payment} = \text{Monthly Payment} \times \text{Number of Payments}$ Where:

• Number of Payments = Loan Term (in years) × 12 months/year.

Option 1: 30-Year Loan

$\text{Total Payment} = 173.17 \times (30 \times 12)$ $\text{Total Payment} = 173.17 \times 360 = 62,341.20$

Option 2: 15-Year Loan

$\text{Total Payment} = 241.16 \times (15 \times 12)$ $\text{Total Payment} = 241.16 \times 180 = 43,408.80$

Final Answers:

1. Total Payment for Option 1: $62,341.20
2. Total Payment for Option 2: $43,408.80

Comparison

• The monthly payment for the 15-year loan is higher, but the total cost of the loan is significantly lower because you pay less interest over a shorter period.

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Do you want a detailed explanation of the calculations or help visualizing this comparison? Here are some questions for further exploration:

1. How much interest is paid for each loan?
2. How does the total interest compare between the two options?
3. What is the effective cost savings of the 15-year loan over the 30-year loan?
4. How does increasing the monthly payment on the 30-year loan affect total interest paid?
5. Would an additional principal payment reduce the loan term significantly for either option?

Tip: Shorter loan terms generally lead to lower total interest payments, even if the monthly payments are higher.