Question

Aaron took out a 30-year mortgage for $100,000 at 7%. How much will he pay over one year? (Hint: multiply the monthly mortgage payment by 12.) I assume $536.82 and I multiply 12= $6441.81

Answer 1

To determine the monthly mortgage payment:

`\begin{gathered} Pr\text{incipal = \$100,000} \\ Interest\text{ rate = 7 \%} \\ fixed\text{ payment time = 30 years} \end{gathered}`

Hint :multiply the monthly mortgage payment by 12

The annual interest rate (r) on the loan, but beware that this is not necessarily the APR = interest divide by 12

`\text{APR=7 \%/12 = 0.07/12=0.00583}`

Using a Loan calculator

`\begin{gathered} \mleft\lbrace100,000*.0.07/12*\mleft[1+0.07/12^{12(30)^{}}\mright]\}/\mleft\{\mleft[1+0.07/12^(12)\mleft(30\mright)\mright]-1\mright\}\mright?\text{ } \\ =\text{ \$665} \end{gathered}`

With a $100,000 home loan, you will pay $665 monthly and over a year , Aaron will pay 12 x $665

`\begin{gathered} 1\text{ month payment = \$665} \\ 12\text{ month payment = 12 }*\text{ \$665} \\ \text{ = \$7980} \end{gathered}`

Therefore the payment over one year = $ 7980