Jane is trying to decide whether to buy a house or a trailer. A house costs $480,000 and a trailer costs $120,000. Each loan will be paid in monthly installments over 20 years. How much more is the monthly payment on the house compared to the trailer?
How many months are the loans? ** First find how many months the loans last: 20 years * 12 months/year = <<20*12=240>>240 months
How much is the monthly payment? ** Then divide the cost of the house by the number of payments to find the monthly payment before interest: $480,000 / 240 months = $<<480000/240=2000>>2000/month
How much is the monthly payment? ** Then do the same thing to find the monthly payment before interest on the trailer: $120,000 / 240 months = $<<120000/240=500>>500/month
How much more is the house payment than the trailer? ** Then subtract the cost of the trailer payment from the cost of the house payment to find the difference: $2000/month - $500/month = $<<2000-500=1500>>1500/month
#### 1500