SOLUTION: Joe Levi bought a home in Arlington Texas, for $140,000. He put down 20% and obtained a mortgage for 30 years at 51/2% What is Joe's monthly payment? What is the total interest co
Algebra.Com
Question 987404: Joe Levi bought a home in Arlington Texas, for $140,000. He put down 20% and obtained a mortgage for 30 years at 51/2% What is Joe's monthly payment? What is the total interest cost of the loan? Please work this problem all the way out. Thanks
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
The periodic payment, 
, on a fully amortized loan with an original principal amount of 
, at an annual interest rate of 
expressed as a decimal, where the number of payments per year is 
, for a term of 
years is:
^{nt}}{\left(1\ +\ \frac{r}{n}\right)^{nt}\ -\ 1}\right))
Get out your calculator and get to work. Remember to reduce the purchase price by the down payment amount in order to find the original principal of the loan. Once you have the PMT amount, multiply by the total number of payments, which is the product of the number of payments per year and the number of years. That will give you total amount repaid. From this amount, subtract the original principal amount to determine the total interest paid.
John
My calculator said it, I believe it, that settles it
RELATED QUESTIONS
Suppose that 10 years ago you bought a home for $110,000, paying 10% as a down payment,... (answered by Theo)
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment,... (answered by ikleyn,math_tutor2020)
1. Wen Seng operates an ice cream shop. He is trying to decide whether to expand his... (answered by ikleyn)
Jenelle bought a home for $470,000, paying 20% as a down payment, and financing the rest... (answered by Boreal)
What is the loan payment for a $128,000 home bought with a 20% down payment and the... (answered by jim_thompson5910)
Jenelle bought a home for $220,000, paying 24% as a down payment, and financing the rest... (answered by Theo)
Kim Barnes bought a new home for 250,000. She made a 30% down payment and got a 4% 20... (answered by ptfile)
You borrow $650,000 from a mortgage company for a 30 year loan at 7.1% interest to... (answered by math_tutor2020)
You've bought a house for $191,900, and obtained a 30-year mortgage at an annual interest (answered by ikleyn)