House Financing Example - 10,979 36,340 8,467 2,512 114,979...

Home Financing Comparison
You have the following home financing options.
Finance a 100,000 home over 15 years at a fixed rate of 7% with annual payments (end of year), or
finance the 100,000 home over 30 years at a fixed rate of 7.5% with annual payments (end of year).
Assume that you Invest the difference between the 15 year and 30 year mortgage in a tax deffered
retirement account earning 10%. Which option will provide you with the greatest wealth in 30 years?
15 Year Mortgage 30 Year Mortgage
Years to Annual house Annual Retirement Annual house Annual Retirement
retire payments retirement account payments retirement account
deposits balance deposits balance
30 10,979 0 0 8,467 2,512 2,512
29 10,979 0 0 8,467 2,512 5,275
28 10,979 0 0 8,467 2,512 8,315
27 10,979 0 0 8,467 2,512 11,658
26 10,979 0 0 8,467 2,512 15,336
25 10,979 0 0 8,467 2,512 19,382
24 10,979 0 0 8,467 2,512 23,832
23 10,979 0 0 8,467 2,512 28,727
22 10,979 0 0 8,467 2,512 34,112
21 10,979 0 0 8,467 2,512 40,035
20 10,979 0 0 8,467 2,512 46,550
19 10,979 0 0 8,467 2,512 53,717
18 10,979 0 0 8,467 2,512 61,601
17 10,979 0 0 8,467 2,512 70,273
16 10,979 0 0 8,467 2,512 79,812
15 0 10,979 10,979 8,467 2,512 90,306
14 0 10,979 23,056 8,467 2,512 101,848
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