Question

You borrow $149,000 to buy a house. the mortgage rate is 7.5% and the loan period is 30 years. payments are made monthly. if you pay for the house according to the loan agreement, how much total interest will you pay?

Answer 1

Hi there
First find the monthly payment by using the formula of the present value of annuity ordinary
The formula is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 149000
PMT monthly payment?
R interest rate 0.075
K compounded monthly 12
N time 30 years
We need to solve the formula for PMT
PMT=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
PMT=149,000÷((1−(1+0.075÷12)^(
−12×30))÷(0.075÷12))
=1,041.83

Second find how many months in 30 years
12×30=360 months

Now find how much interest will be paid
1,041.83×360−149,000
=226,058.8.....answer

Good luck!

Answer 2

The total interest is $140,03729.

Data;

• Principal = $149,000
• rate = 7.5% = 0.075
• T = 30 years
• N = 12 months

Compound Interest

To solve this problem, we have to use the formula of compound interest which is given as

$I = P(1+ \frac{r}{n})^n^t$

Let's substitute the values into the equation

$I = 149000(1+ \frac{0.075}{12})^1^2^*^3^0\\I = 149000(1.00625)^3^6^0\\I = 149000*9.421\\I = 1403729$

The total interest is $140,03729.

Learn more on compound interest here;

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