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. ☺☺☺☺
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