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The problem presented is comparing two loan options: 

1. **Option 1**: A 30-year loan with an APR of 9.5%, where the monthly payment is $1,345.40.
2. **Option 2**: A 15-year loan with an APR of 8.5%, where the monthly payment is $1,575.60.

To make the comparison meaningful, we will compute:
1. **Total payments for each loan** (monthly payment × total number of months).
2. **Interest paid for each loan** (total payments - principal, which is $160,000).

Let's calculate:

### Total payments for Option 1:
- Loan term: 30 years = 30 × 12 = 360 months.
- Total payment = $1,345.40 × 360 = $484,344.

### Total payments for Option 2:
- Loan term: 15 years = 15 × 12 = 180 months.
- Total payment = $1,575.60 × 180 = $283,608.

### Interest paid for Option 1:
- Interest = Total payment - Loan amount = $484,344 - $160,000 = $324,344.

### Interest paid for Option 2:
- Interest = Total payment - Loan amount = $283,608 - $160,000 = $123,608.

**Summary:**
- **Option 1 (30 years)**: Total payment = $484,344, Interest paid = $324,344.
- **Option 2 (15 years)**: Total payment = $283,608, Interest paid = $123,608.

Would you like to see more details or calculations? 

Here are 5 follow-up questions:
1. How is the total payment affected by the interest rate and loan term?
2. Why does the 15-year loan have less interest compared to the 30-year loan?
3. What is the benefit of a lower APR in the long run?
4. How does a higher monthly payment reduce the overall interest paid?
5. What role does loan term play in determining total cost?

**Tip**: When considering loans, a shorter loan term often means higher monthly payments but significantly less interest paid over time.

Compare the monthly payment and total payment for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 9.5%. Option 2: a 15-year loan at an APR of 8.5%. Find the monthly payment for each option.

This problem compares two loan options: a 30-year loan with an APR of 9.5% and a 15-year loan with an APR of 8.5%. It involves calculating monthly payments and total payments using loan amortization formulas. Ideal for students in Grade 12 or college-level courses.

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