Question

What is the monthly payment on a mortgage of $75000 with a 6.2% interest rate that runs 30 years? How much interest is paid over the 30 years?

Answer 1

Amount borrowed = $75,000
Annual Interest Rate = 6.2%
Monthly Interest Rate = 6.2%/12
Monthly Interest Rate = 0.5167%
Period = 30 years or 360 months

Monthly Payment * PVIFA(0.5167%, 360) = $75,000
Monthly Payment * (1 - (1/1.005167)^360) / 0.005167 = $75,000
Monthly Payment * 163.26666 = $75,000
Monthly Payment = $459.37

Total Amount paid over 30 years = 360 * $459.37
Total Amount paid over 30 years = $165,373.20

Total Interest Paid over 30 years = $165,373.20 - $75,000
Total Interest Paid over 30 years = $90,373.20