Question

mr. and mrs. Rainer took out a $240,000 loan to purchase their home. If the interest rate on the loan is 1.2% compounded bimonthly, how much interest will they paid after 30 years?

Answer 1

$103968.11.

Explanation:

Given information:

Principal amount = $240,000

Rate of interest = 1.2% = 0.012

Number of years = 30

Number of times in an year = 24

Formula for amount:

`A=P(1+(r)/(n))^(nt)`

where,

P is principal, r is rate of interest, t is number of years, n is number of times interest compounded in a year.

`A=240000(1+(0.012)/(24))^(24(30))`

`A=240000(1.0005)^(720)`

`A=343968.11`

Now,

`Interest=A-P`

`Interest=343968.11-240000`

`Interest=103968.11`

Hence, the interest is $103968.11.