Question

Help please!!!! 50 points!!!!

Amara has taken out a fixed rate mortgage for $125,000 at 4.04% for 20 years, or 240 months. Her payments are $730. What is the total cost of the loan?
A. $130,050
B. $175,200
C. $211,680
D. $226,000

Answer 1

182,427.03

Explanation:

total cost = r*p*n

---------------

1- (1+r) ^-n

Where r is the loan rate, p is the principal, n is the number of payments

rate = 4.04% / 12 months

total cost = (.0404/12)* 125000* 240

------------------------------

1- (1+.0404/12)^-240

101000

-----------------

1-.44635

101000

-----------------

.55364

182,427.03

Using Payments are 730 *240 months

730*240 =175200