Find the monthly house payments necessary to amorti
ze each loan. Then calculate the
total payments and the total amount of interest paid : $199,000 at 7.01% for 25 years
P = (Po*r*t)/(1-(1+r)^-t)
Po = Initial principal = $199,000
r = (7.01%/12)/100% = 0.00584 = Monthly
% rate expressed as a decimal.
t = 25yrs * 12mo/yr. = 300 Months.
Plug the above values into the given Eq.
and get:
P = $422,328.10
Int.(Tot.) = P-Po = $223,328.10
Monthly Payment = P/t = $1407.76
Int.(1st mo.) = Po*(7.01/12/100)*t = $1162.49(t=1 mo.)
To find the monthly house payments necessary to amortize a loan, you can use the formula for a fixed-rate mortgage.
The formula is:
M = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
M is the monthly payment
P is the loan amount
r is the monthly interest rate (annual interest rate divided by 12)
n is the total number of payments (number of years multiplied by 12)
For the given loan amount of $199,000 at an interest rate of 7.01% for 25 years, let's calculate the monthly payments.
First, calculate the monthly interest rate:
r = 7.01% / 12 / 100 = 0.00584
Next, calculate the total number of payments:
n = 25 * 12 = 300
Now, substitute the values into the formula:
M = 199,000 * (0.00584 * (1 + 0.00584)^300) / ((1 + 0.00584)^300 - 1)
By calculating this, you will get the monthly house payment required to amortize the loan.
To calculate the total payments, simply multiply the monthly payment by the total number of payments:
Total payments = M * n
To calculate the total amount of interest paid, subtract the loan amount from the total payments:
Total interest paid = Total payments - loan amount
By following these steps, you can find the monthly house payments, total payments, and total amount of interest paid for the given loan.