Final answer:
To calculate the total cost of a $200,000 30-year mortgage at 5%, with monthly payments of $1,074, multiply the monthly payment by the number of payments (360), resulting in a total cost of $386,640, nearly twice the original loan amount.
Step-by-step explanation:
If you have a $200,000 30-year mortgage at 5% interest and make monthly payments of $1,074, to find the total cost of the loan, you would calculate the total payments made over 30 years (360 months). The total cost of the loan can be calculated as follows:
Total payment amount = Monthly payment × Number of payments
Total payment amount = $1,074 × 360
Total payment amount = $386,640
Thus, the total cost of the loan, considering the payments made over 30 years, would be $386,640. This is almost twice the original loan amount due to the interest accrued over the life of the loan.