Question

Brandon has a 15-year fixed rate mortgage for $175,000 with monthly payments of $1,480.97. The annual interest rate is 6%. What is the total cost of the principal and interest for this loan rounded to the nearest dollar

Answer 1

Amortization Solution:

A= P[[r(1+r)^n]/[((1+r)^n)-1)]]
P= $175,000
r= .06/12; divide interest rate by 12 to get monthly interest of 0.005
n=15*12=180; multiply by 12 to get the total number of payments
A= $87500 is the total cost of principal with interest rate of 0.5% monthly