Question

You just purchased a home and agreed to a mortgage payment of $1,264 a month for 30 years at 7.5 percent interest, compounded monthly. How much interest will you pay over the life of this mortgage assuming that you make all payments as agreed? PLEASE INCLUDE HOW TO ENTER ON FINANCIAL CALCULATOR.

Answer 1

Monthly Payment = PMT	$1,264.00
Rate = 7.5%/12	0.63%
Period = 30 x 12	360
Future Value FV	$0.00
Amount Borrowed = PV	$180,774.28
Total Payments = $1264 x 360	$455,040.00
Total Interest = $455,040 - $180,774.28	$274,265.72
To solve for the present value of this annuity since that is the amount that you borrowed. Press 2nd FV to clear the financial keys. Enter the numbers into the appropriate keys: 360 into N, .63 into I/Y, and 1264 into PMT. Now press CPT PV to solve for the present value. The answer is $180,774.28