Post a New Question

math

posted by .

Suppose a 60,000 martgage is to be amortized at 7.5% interest. Find the total amount of interest that would be paid for each term a) 10 years b) 30 years

  • math -

    I will do a) you can do b) the same way

    You don't say, but I will assume there are equal monthly payments

    a) i = .075/12 = .00625
    n = 12(10) = 120

    60,000 = P (1 - 1.00625^-120)/.00625
    60000 = P(84.244742...)
    P = 712.21

    interest paid for the 10-year mortgage
    = 712.21(120) - 60000
    = 25,465.27

    do b) the same way,
    hint: there is only one number you have to change.

    BTW, I don't like to do the calculation at the end for the interest, since it is not really valid.
    We are just doing straight multiplication over a 10 year span without considering that time = money
    e.g. The payment of $712.21 made in month 18 is not really the same as the payment of $712.21 made in month 65.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. math

    a. Find the monthly payments for a simple interest amortized loan of $16000 at 7 1/8 % for 7 years. monthly payment = $ b. Find the total interest for a simple interest amortized loan of $16000 at 7 1/8 % for 7 years. total interest …
  2. math

    The problem describes a debt to be amortized. A man buys a house for $350,000. He makes a $150,000 down payment and amortizes the rest of the debt with semiannual payments over the next 12 years. The interest rate on the debt is 11%, …
  3. math

    The problem describes a debt to be amortized. A man buys a house for $350,000. He makes a $150,000 down payment and amortizes the rest of the debt with semiannual payments over the next 12 years. The interest rate on the debt is 11%, …
  4. Math

    John Receive a 10,000 loan, with an interest rate of 6 %, for 6 years. What is the total amount of interest paid to the bank?
  5. math

    Suppose a 60,000 martgage is to be amortized at 7.5% interest. Find the total amount of interest that would be paid for each term a) 10 years b) 30 years.
  6. math

    rick borrows 48,000 the loan will be a 10% add-on loan interest will be charged for 2 full years, rick will repay on monthly basis what will the total amount of interest paid,what will be the monthly amount paid,what is true rate interest …
  7. Algebra( check my answers)

    1. Juan deposited $200 in a savings account earning 3% interest over 2 years. What was the total amount of interest earned after 2 years?
  8. Finance - Loans problem please help

    A company borrows $170000, which will be paid back to the lender in one payment at the end of 5 years. The company agrees to pay monthly interest payments at the nominal annual rate of 7% compounded monthly. At the same time the company …
  9. Math

    Suppose you have student loans totaling $10,500 when you graduate from college. The APR is 9% and the loan term is 10 years. a) What are your monthly payments?
  10. Math

    Suppose you borrowed $25,000 for a car at an APR of 8%, which you are paying off with monthly payments of $510 for 5 years. a) What’s the loan principal?

More Similar Questions

Post a New Question