Question

You wish to take out a $375,000 mortgage, which is to be paid monthly. The yearly interest rate on the loan is 3% and the loan is for 25 years. How much will the total interest be? Give your answer to the nearest dollar.

Answer 1

We have to determine the 3% per year first, and then multiply it by 25 (The total ammount of years):

$x=\frac{375000\cdot3}{100}\Rightarrow x=11250$

So $11250 is the yearly interest, and now for 25 years it would be:

$T=11250\cdot25\Rightarrow T=281250$

So, in 25 years you would need to pay $281250 on interest.