SOLUTION: Sam bought a home with a 30 year mortgage of $200,000 at an annual interest rate of 4.25%. Assuming Sam makes his monthly payment over the term of the loan, what will be the total

Question 1023887: Sam bought a home with a 30 year mortgage of $200,000 at an annual interest rate of 4.25%. Assuming Sam makes his monthly payment over the term of the loan, what will be the total amount of his payments? Also what will be his payment per month if he pays the same amount monthly?
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
To amortize a loan, the formula is P=L[c(1+c)^n]/[(1+c)^n-1] where P is the payment,L is the original loan, c is the interest rate per period, and n is the total number of payments. So:
P=200000[(.0425/12)(1+(.0425/12))^360))/[(1+(.0425/12))^360 -1]
P=2529.2100430477458909800905736667/2.5706494725379941990307161040001
P=$983.88/month
360 x 983.88=$354196.80 total payments over 30 years. ☺☺☺☺
RELATED QUESTIONS
1. Wen Seng operates an ice cream shop. He is trying to decide whether to expand his... (answered by ikleyn)

Lou purchases a home for $575,000. He makes a down payment of 15% and finances the... (answered by Boreal)

The Martinezes are planning to refinance their home. The outstanding balance on their... (answered by Solver92311)

GIVEN: Monthly mortgage payment = 514.980676 We can calculate how much of a... (answered by ankor@dixie-net.com)

Hal purchases a car for $65,000, makes a down payment of 30%, and finances the rest with... (answered by addingup)

Five years ago, Diane secured a bank loan of $360,000 to help finance the purchase of a... (answered by Theo)

Sam saved his money until he had $10 000 to invest. He invested x dollars into a... (answered by Theo,MathTherapy,greenestamps)

George secured an adjustable-rate mortgage (ARM) loan to help finance the purchase of his (answered by Theo)

Complete the following table, which shows the monthly payments on a $100,000, 30-year... (answered by Theo)