Question

1) If you borrow $120,000. At an APR of 7% for 25 years, you will pay $848.13 per month. If you
borrow the same amount at the same APR for 30 years, you will pay $798,36 per month. What is the total interest paid on the 30-year mortgage?

Answer 1

Answer:

$167,409.60 interest paid

Step-by-step explanation:

If $838.13 is paid each month for 25 years,

total paid = 848.13 x 12 x 25 = $254,439

Therefore, 254,439 - 120,000 = $134,439 interest paid

If $798.36 is paid each month for 30 years,

total paid = 798.36 x 12 x 30 = $287,409.60

Therefore, 287409.6 - 120,000 = $167,409.60 interest paid