Question

You wish to take out a $200,000 mortgage. The yearly interest rate on the loan is 4% compounded monthly, and the loan is for 30 years. Calculate the total interest paid on the mortgage.

Round your answer to the nearest dollar.
Do NOT round until you have calculated the final answer.
Do NOT include commas or the dollar sign in your answer.

Answer 1

143,739

Explanation:

Answer 2

Explanation:

P0=d(1−(1+rk)−Nk(rk).

We have P0=$200,000,r=0.04,k=12,N=30, so substituting in the numbers into the formula gives

$200,000=d(1−(1+0.0412)−30⋅12)(0.0412),

$200,000=209.4612d⟹d=$954.83.

So our monthly repayments are d=$954.83. To calculate the total interest paid, we find out the entire amount that's paid and subtract the principal. The total amount paid is

Total Paid=$954.83×12×30=$343,738.80

and therefore the total amount of interest paid is

Total Interest=$343,738.80−$200,000=$143,738.80,

which is $143,739 to the nearest dollar.