Question

Lynn bought a $300,000 house, paying 10% down, and financing the rest at 6.5% interest for 30 years.

a. What are the monthly payments?

b. How much interest will she pay over the life of the loan?

c. What percentage of your total payment was the interest?

((Can the work be done in excel? Please?))

Answer 1

Yes, the work can be done in excel. The following formulae would help.

Price of the house =  $300,000

Down payment = 10%

Loan amount (PV) = 300,000*(1-10%) = $ 270,000

Rate = 6.5%/12

Number of years (nper) = 30*12 = 360 periods

a)

Monthly payments (PMT) = = $ 1,706.58

b)

Interest paid over the life of the loan =

= 344,370.12

c)

Total payments over the period = $ 1,706.58 * 360 =$ 614,370.12

% interest paid over the total payments =  (344,370.12/ 614,370.12) = 56.05%