Question

Rush Trainer purchased a houseboat for $165,000. The financing company requires a 15% down payment for a 30-year loan at 7%. At the end of 30 years, what will be the total amount of interest charged? (Hint: First subtract the down payment from the purchase price to find the amount to be financed.)

Answer 1

The answer is $195,508.50

Answer 2

The total amount of interest charged is $195,507.6

Explanation:

Total Amount = $165000 , No. of months = 12×30 = 360 months ,Down Payment Rate = 15%

Monthly Payment for $1000 loan on 7% interest rate = $6.65

`Down\thinspace Payment = 0.15\cdot Total\thinspace Amount\approx 24,750\\\\Amount\thinspace Mortaged=Total\thinspace Amount-Downpayment\\\implies Amount\thinspace Mortaged=165,000-24,750=140,250\\\\Monthly\thinspace Payment=(Amount\thinspace of\thinspace Mortaged)/(1000) \cdot Monthly\thinspace payment\thinspace for\thinspace $1000\thinspace loan\\\\\implies Monthly\thinspace Payment=(140250)/(1000)\cdot 6.65\approx 932.66\\\\ Total\thinspace Amount\thinspace paid = Monthly\thinspace Payment\cdot No.\thinspace of\thinspace Months\\\implies Total\thinspace Amount\thinspace paid = 932.66\cdot 360\approx 355,757.6$\\\\Total\thinspace interest=Amount\thinspace Paid - Amount\thinspace Mortaged\\\implies Total\thinspace interest=355,757.6-140250\approx 195,507.6`

⇒ Total Interest Charged = $195,507.6