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? Let's think first. Chain of thought:
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First find how many months the loans last: 20 years * 12 months / year = 240 months. Then divide the cost of the house by the number of payments to find the monthly payment before interest: $480,000 / 240 months = $2000 / month. Then do the same thing to find the monthly payment before interest on the trailer: $120,000 / 240 months = $500 / month. Then subtract the cost of the trailer payment from the cost of the house payment to find the difference: $2000 / month - $500 / month = $1500 / month.
Therefore, the answer is 1500.
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