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Brad decides to purchase a $280,000 house. He wants to finance the entire balance. He has received an APR of 4.1% for a 30 -year mortgage. Over the course of the loan, how much interest will Brad pay?

2 Answers

7 votes

Final answer:

To calculate the total interest paid on a $280,000 house with a 4.1% APR over 30 years, we need the monthly payment amount. Without it, we cannot provide an exact figure, but Brad can calculate the interest by multiplying the monthly payment by 360 and subtracting the principal, which is not given in the question.

Step-by-step explanation:

When Brad finances a house with a mortgage, he will be paying both the principal and interest over the life of the loan. To calculate the total interest Brad will pay on a $280,000 house with an APR of 4.1% over 30 years, we would typically use an amortization formula or calculator. However, since we don't have the monthly payment amount or the exact formula provided in the question, we can't provide an exact figure.

An example with different numbers is given where a $300,000 loan at a different interest rate leads to paying a total of $573,847.99 over 30 years. In this case, interest and principal are both included in the total payment. Therefore, if Brad knows his monthly payment, he can multiply that by 360 (the number of months in 30 years) and subtract the original loan amount ($280,000) to find the total amount of interest paid over the course of the loan.

User Tofarr
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7.3k points
4 votes

Final answer:

Brad will pay $364,800 in interest over the course of the loan.

Step-by-step explanation:

To calculate the amount of interest Brad will pay over the course of the loan, we can use the formula: Interest = Total Balance x Annual Interest Rate x Loan Term. In this case, the total balance is $280,000, the annual interest rate is 4.1%, and the loan term is 30 years.

First, convert the annual interest rate to a decimal by dividing it by 100: 4.1% = 0.041.

Next, calculate the interest: Interest = $280,000 x 0.041 x 30 = $364,800.

Therefore, Brad will pay $364,800 in interest over the course of the loan.

User Micahblu
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