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

3% of $375,000 is 11,250.

Therefore, we will multiply $11,250 by 25 which is equal to $281,250.

The yearly interest after the 25 years is up will be $281,250

Answer 2

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

`x=(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.