Question

Mortgage payments Principal : $ 180,000.00 Interest Rate Monthly Payment How much money will be spent in interest alone over the course of the 3.5 % 30 - year mortgage described in the table ? 3.5% 5% $808 $966 $ 1079 6% A. $110,880 B. $6,300 C. $180,000 D. $ 290,880

Answer 1

To calculate the amount of money spent in interest alone over the course of a 30-year mortgage, we can use the formula:

Total Interest = (Monthly Payment x Number of Payments) - Principal

For a 3.5% 30-year mortgage with a principal of $180,000, the monthly payment can be calculated using the formula:

Monthly Payment = (Principal x Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Payments))

where Monthly Interest Rate = Annual Interest Rate / 12, and Number of Payments = 30 years x 12 months per year = 360.

Plugging in the values, we get:

Monthly Payment = (180,000 x 0.0035) / (1 - (1 + 0.0035)^(-360)) = $808.28

Using this monthly payment, we can calculate the total interest over the 30-year period:

Total Interest = ($808.28 x 360) - $180,000 = $101,020.80

Therefore, the correct answer is A. $110,880 (which is not one of the options given).

Answer 2

The amount of money spent in interest alone over the course of the 3.5% 30-year mortgage is $110,880.

Step-by-step explanation:

To calculate the amount of money that will be spent in interest alone over the course of a mortgage, you can use the formula:

Interest = Total Payments - Principal

In this case, the principal is $180,000.00 and the monthly payment is $808. To find the total payments, you can multiply the monthly payment by the number of months in the mortgage. For a 30-year mortgage, there are 30 * 12 = 360 months. So, the total payments would be $808 * 360 = $290,880. Finally, subtracting the principal from the total payments gives us the amount spent in interest alone, which is $290,880 - $180,000 = $110,880.