Question

Leaf U. Allone needs to borrow $120,000 from his local bank for the home he is buying. The bank offers a 30 year mortgage at an APR of 6.5%.

A) How many monthly payments would it take to pay off the 30 year loan?

B) What is her monthly payment on the 30 year loan?

C) What is the total paid to the bank over 30 years?


D) How much of that is interest?

Answer 1

A) It would take 360 monthly payment to pay of the 30-year loan.

B) Her monthly payment would be $650.

C) The total paid back to bank over 30 years would be $234,000

D) The total amount of interest was $114,000 (95% interest back to the bank after 30 years).

Explanation:

6.5 percent *120000 =

(6.5:100)*120000 =

(6.5*120000):100 =

780000:100 = 7800

6.5% of 120,000 is 7,800.

Every year Leaf U. Allone has to pay $7,800 to the bank.

12 months in a year.

7,800 ÷ 12 = $650

Every month Leaf U. Allone has to pay $650 to the bank.

Over 30 years of paying 7,800

Multiply 7,800 * 30

= $234,000

To find the interest,

subtract 120,000 from 234,000

= $114,000 in interest.

Meaning the home value went up.