Final answer:
The total interest and principal for a mortgage can be calculated by multiplying the monthly payment by the number of payments made over the mortgage term and then subtracting the original loan amount to isolate the total interest paid.
Step-by-step explanation:
The question asks about calculating the total interest and principal paid over the life of a mortgage. For a $300,000 loan at 6% interest with monthly compounding over 30 years, the monthly payment is calculated using the given formula.
You'd need to find the total payments over 30 years by multiplying the monthly amount by the number of months (360) to determine how much total money has been paid. To find the total interest, subtract the original loan amount from the total payments made over the life of the mortgage.
To apply this to Joanna's scenario, where she can afford $12,000 a year for a house loan at 4.2% annually for 30 years, you would need to use a mortgage calculator to determine the maximum loan she can take out and the total amount she would end up paying.
The total amount of interest on a $5,000 loan for three years with simple interest can be found by multiplying the principal by the interest rate and the number of years. To find the interest rate charged on a loan where you receive $500 in simple interest for a $10,000 loan over five years, divide the total interest received by the product of the principal and the number of years.