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You want to get a home loan for $240,000. The bank is offering a 3% interest rate for 15 years.
What will your monthly payments be?
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Use the formula for the monthly payment for a loan
M =
where P is the loan amount; r = is the interest rate per month;
n is the number of payments (same as the number of months); M is the monthly payment.
In this problem P = $240000; r = , n = 15*12 = 180 monthly payments.
Substitute these values into the formula and get for monthly payment
M = = $1657.40.
ANSWER. The monthly payment is $1657.40.
In total, you will pay 15*12*1657.40 = 298,332 dollars in 15 years.
The difference $298,332 - $240,000 = $58,332 is the interest you pay to financial company.
Solved.