Question

Mae took out a 30-year loan for $235,000 at 4.6% interest, compounded monthly. If her monthly payment on the loan will remain $1204.71 for the life of the loan, how much will Mae have paid in interest once the loan is paid off?

Answer 1

1204.71*30(years)*12(months per year)=$433,695.60
Original price was 235,000 so she paid 433,695.60-235,000=$198,695.60 in interest.

Answer 2

Mae paid $ 198695.6 in interest once the loan is paid off.

Explanation:

Amount taken for loan, P = $ 235,000

Rate of interest, R = 4.6 %

Interest is compounded monthly for 30 years.

Monthly payment paid = $ 1204.71

Number of months in a year = 12

Number of months in 30 year = 12 × 30 = 360

So, Total Amount she pay in 30 year = 360 × 1204.71 = $ 433695.6

Thus, Interest = 433695.6 - 235000 = $ 198695.6

Therefore, Mae paid $ 198695.6 in interest once the loan is paid off.