You need a 25-year, fixed-rate mortgage to buy a new home for $180,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this…

You need a 25-year, fixed-rate mortgage to buy a new home for $180,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this 300-month loan. However, you can afford monthly payments of only $850, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single payment.

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