Question

Donna wants to buy a house for $810,000.00. She makes a 20% down payment andborrows the rest by getting a 15-year mortgage. Her monthly mortgage payment is$6,264.00a) What is the principal of her mortgage?b) What is the total she will pay on the loan?c) How much interest will she pay over the life of her loan?

Answer 1

a) $648,000

b) $1,127,520

c) $479,520

Step-by-step explanation:

First, we need to find how much is 20% if $810,000.00, so

$810,000 x 20% = 810,000 x 20 / 100 = $162,000

It means that Donna makes a down payment of $162,000. So, the amount that she borrow was:

$810,000 - $162,000 = $648,000

So, the principal of her mortgage was $648,000

On the other hand, she will pay $6,264 every month for 15 years, so she will pay a total of

$6,264 x 12 x 15 = $1,127,520

So, she will pay a total of $1,127,520 on the loan.

Finally, the interest will be the difference between the principal and the total pay

$1,127,520 - $648,000 = $479520

Therefore, the answers are:

a) $648,000

b) $1,127,520

c) $479,520