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Divya has a 30-year mortgage for $248,000 with a 3.8% fixed annual interest rate.What is the total interest Divya pays on her loan?$282,720.00$60,980.80$168,005.20$416,005.20

User TheBittor
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Final answer:

Divya will end up paying approximately $167,805.60 in total interest on her loan of $248,000.

Step-by-step explanation:

To find the total interest paid, we can use the formula:

Total Interest = Total Loan Cost - Principal Amount

First, let's calculate the total loan cost:

Convert the annual interest rate to a decimal: 3.8% = 0.038

Calculate the monthly interest rate: 0.038 ÷ 12 = 0.003167

Calculate the total number of months (30 years × 12 months/year = 360 months)

Use the formula for the monthly payment of a mortgage:

Monthly Payment = Loan Amount × (Monthly Interest Rate ÷ (1 - (1 + Monthly Interest Rate)^(-Total Number of Months)))

Loan Amount = $248,000

Monthly Interest Rate = 0.003167

Total Number of Months = 360

Substituting the values into the formula, we get:

Monthly Payment = $248,000 × (0.003167 ÷ (1 - (1 + 0.003167)^(-360)))

Monthly Payment ≈ $1,155.01

Next, calculate the total loan cost:

Total Loan Cost = Monthly Payment × Total Number of Months

Total Loan Cost = $1,155.01 × 360

Total Loan Cost ≈ $415,805.60

Finally, subtract the principal amount from the total loan cost to find the total interest paid:

Total Interest = Total Loan Cost - Principal Amount

Total Interest = $415,805.60 - $248,000

Total Interest ≈ $167,805.60

User ThomasMX
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