You plan to purchase a $360,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 8.60 percent, or a 20-year mortgage with a rate of 7.50 percent. you will make a down payment of 15 percent of the purchase price.
a. calculate the amount of interest and, separately, principal paid on each mortgage. what is the difference in interest paid

The total amount of interest for a 30-year mortgage 8.6%pa and  a 20-year with 7.5% pa is $548,855 and $285,628 respectively.

The monthly principal repayment for a 30-year mortgage 8.6%pa and a 20-year with 7.5% pa is $850 and $1,275 respectively, but the total is same as loan amount of $306,000.

Explanation:

The mortgage loan will be $306,000 (= 85% * $360,000)

Assuming the installment is monthly, then the interest and principal on each mortgage is as calculation attached

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