Question

Paul lands a home mortgage of $58,200 at a

7.40% interest rate. He plans to pay this after 3

years. What will the total principal + interest

payment be?

Answer 1

$72,100

Explanation:

To calculate the total principal+interest payment, you can use the formula to find the future value:

FV=PV(1+i)^n

FV= Future value

PV= Present value= $58,200

i= Interest rate= 7.40%

n= Number of periods of time= 3 years

Now, you can replace the values on the formula:

FV=58,200*(1+0.0740)^3

FV=58,200*(1.0740)^3

FV=72,100

According to this, the answer is that the total principal + interest payment will be $72,100.