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
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