You take out a 30- yr mortgage loan, purchase price is $120,000 put $20,000 down and finances the balance of $100,000 at fixed annual loan rate of 12%, what will be your monthly payment? How much total interest will you have paid at the end of 30 years?
Pt = Po*r*t/(1-(1+r))^-t.
r = (12%/12) / 100% = 0.01 = Monthly %
rate expressed as a decimal.
t = 30yrs * 12mo/yr = 360 Months = Length of lan.
Pt = (100,000*0.01*360)/ (1-(1.01)^-360)= 360,000/0.97218331 = $370,300.53.
= Tot. Pd after 30 yrs.
Monthly(I+P)=370,300.53 / 360=$1028.61.
Tot. Int = Pt - Po=370,300.53-100,000 =
270,300.53.
To calculate the monthly payment on a mortgage loan, we can use a formula called the Amortization Formula. The formula is:
Monthly Payment = P * r * (1 + r)^n / ((1 + r)^n - 1)
Where:
P = Principal amount (loan amount)
r = Monthly interest rate (annual rate divided by 12 and converted to decimal)
n = Total number of payments (30 years multiplied by 12 months)
Let's break down the calculation for your specific mortgage loan:
Principal amount (P) = $100,000 (balance financed after the down payment)
Monthly interest rate (r) = 0.12 / 12 = 0.01
Total number of payments (n) = 30 years * 12 months = 360
Now, let's plug in these values into the formula:
Monthly Payment = $100,000 * 0.01 * (1 + 0.01)^360 / ((1 + 0.01)^360 - 1)
Using a calculator or spreadsheet software, you can compute:
Monthly Payment = $1,029.61 (rounded to the nearest cent)
So, your monthly payment for the mortgage loan will be approximately $1,029.61.
To calculate the total interest paid over 30 years, we can use the formula:
Total Interest = (Monthly Payment * n) - P
Where:
Monthly Payment = $1,029.61 (as calculated above)
n = 360 (as calculated above)
P = Principal amount = $100,000
Now, let's plug in these values into the formula:
Total Interest = ($1,029.61 * 360) - $100,000
Using a calculator or spreadsheet software, you can compute:
Total Interest = $271,456.00
Therefore, over the course of 30 years, you will have paid a total of approximately $271,456.00 in interest.