The Difference in Monthly Payment Between 15-Year and 30-Year Loans
The monthly payment for a 15-year loan would be about ________ times as much as a comparable 30-year loan.
A) 0.5
B) 1.25
C) 2.0
D) the same
Final answer:
The monthly payment for a 15-year loan is typically higher than a 30-year loan, reflecting the shorter payback period; the best estimate from the provided options is approximately (B) 1.25 times higher.
Explanation:
The monthly payment for a 15-year loan would typically be higher than that of a 30-year loan, because you are paying off the same loan amount in half the time, which results in higher monthly payments to ensure the loan is fully paid by the end of the term.
The correct answer to how much higher it would be is not fixed and depends on the interest rates and the terms of the loan, but it's generally not twice as high. Therefore, the best answer from the given options is B) 1.25.
What is the difference in monthly payment between a 15-year loan and a 30-year loan? The monthly payment for a 15-year loan is typically higher than that of a 30-year loan, with an estimate of approximately 1.25 times higher.