Question

Consider a 30-year mortgage at an interest rate of 8% compounded monthly with a $1200 monthly...

Consider a 30-year mortgage at an interest rate of 8% compounded monthly with a $1200 monthly payment. What is the total amount paid in interest?

a.

$236,403.75
b.

$249,448.74
c.

$268,459.81
d.

$289,450.19
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Answer #1

Ans C) $268,459.81

P = Regular Payments
PV = Loan Amount
r = rate of interest
n = no of periods
P = r (PV)
1 - (1 + r )-n
1200 = (8%/12)*PV
1 - (1 / (1 + 8%/12)^360))
1200 = 0.00666666666666667 * PV
0.908556628
PV = 1200 * 0.908556628 / 0.00666666666667
PV = 163540.19
LOAN AMOUNT = 163540.19
TOTAL EMI PAID = 1200 * 30 * 12
432000.00
INTEREST = TOTAL EMI - LOAN AMOUNT
432000 - 163540.19
268459.81
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