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You have a $200,000 30-year mortgage at 5%. what is the total cost of the loan if you pay $1,074/month?

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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.

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