453,939 views
37 votes
37 votes
Question

You wish to take out a $375,000 mortgage, which is to be paid monthly. The yearly interest rate on the loan is 3% and the
loan is for 25 years. Calculate the total interest paid over the life of the loan.
Round your answer to the nearest dollar.
Do NOT round until you have calculated the final answer.
Provide your answer below:

User Gurjot Bhatti
by
2.1k points

2 Answers

25 votes
25 votes

Answer: $1778.29

$375000 = 210.878645d > d = $1778.29

Question You wish to take out a $375,000 mortgage, which is to be paid monthly. The-example-1
User Ivo Merchiers
by
2.8k points
23 votes
23 votes

Answer:$158,488

Explanation:

We have P0=$375,000,r=0.03,k=12,N=25, so substituting in the numbers into the formula gives

$375,000=d(1−(1+0.0312)−25⋅12)(0.0312),

that is,

$375,000=210.87645d⟹d=$1,778.2924.

To calculate the total interest, we have

$1,778.2924×25×12−$375,000=$158,488.

User Jan Buchar
by
2.8k points