Question

Suppose you apply for a 9 year loan in the amount of $23,000 with an APR of 7%, compounded monthly. Your monthly payment is $287.64 determine the total amount of interest paid over the term of the loan

Answer 1

$8065.12

Explanation:

You want the total interest paid on a 9-year $23,000 loan at 7% with monthly payments of $287.64.

Payments

The total of the 9·12 = 108 monthly payments is ...

$287.64 · 108 = $31065.12

Interest

The amount of the payments in excess of the loan amount is the amount paid for interest:

interest = $31065.12 -23000 = $8065.12

The amount of interest paid over the term of the loan is about $8065.12.

<95141404393>