Question

Use the following amortization chart:

Selling price
of home
$ 74,000
Down payment
$ 5,000
Principal
(loan)
$ 69,000
Rate of
interest
5.08
Years
30
Payment per $1,000
$ 5.3682
Monthly mortgage payment
$ 370.41
What is the total cost of interest?
Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar.

Answer 1

Explanation:

To find the total cost of interest, we first need to find the total payment over the life of the loan:

Total payment = Monthly payment x Number of payments

Total payment = $370.41 x (30 x 12)

Total payment = $133,347.60

Next, we need to subtract the principal (loan) amount to find the total interest paid:

Total interest = Total payment - Principal

Total interest = $133,347.60 - $69,000

Total interest = $64,347.60

Rounding to the nearest whole dollar, the total cost of interest is $64,348.