Final answer:
The total interest paid on a $250,000, 30-year fixed-rate amortized loan at 5% with a monthly payment of $1,342.50 is $233,300.
Step-by-step explanation:
The question involves calculating the total interest paid on a fixed-rate amortized loan. To determine the total interest paid over the lifetime of the loan, we multiply the monthly payment amount by the number of payments (360, since it is a 30-year loan) and then subtract the original loan amount from the resulting total payment amount.
So, the calculation for the total interest paid on a $250,000 loan with a monthly payment of $1,342.50 over 30 years will be:
Total interest paid = (Monthly payment × Total number of payments) − Original loan amount
Total interest paid = ($1,342.50 × 360) − $250,000
Total interest paid = $483,300 − $250,000
Total interest paid = $233,300.
Therefore, the borrower will pay a total interest of $233,300 over the course of the 30-year loan.