Asked by alisha

Shawn bought a home for $100,000. He put 20% down and obtained a mortgage for 30
years at 5½%. What is the total interest cost of the loan?
Answered by lindaemory
waqs it $158,400.00? but i still need to see how to work the problem, can you be of help to me?
Answered by name 1
M = P [ i(1 + i)n ] / [ (1 + i)n - 1]
M is the monthly payment; i = rate/12; n=number of payments
For an $80,000 mortgage at 5.5% compounded monthly for 30 years, we would first solve for i as
i = 0.055 / 12 = 0.0045833333 and n as 12 x 30 = 360 monthly payments
i = 0.05 / 12 = 0.004167 and n as 12 x 15 = 180 monthly payments
Next solve for (1 + i)n = (1.0045833333)360 using the xy key on a calculator, which yields 5.187388
Now the formula reads M = P [ i(5.187388)] / [5.187388 - 1] which simplifies to
M = P [0.0045833333 x 5.187388] / 4.187388 or
M = $80,000 x 0.005678899 = $454.23
To determine the total interest paid over the course of the mortgage, multiply the amount of the monthly payment by the number of payments and subtract the principal:
($454.23 x 360) - $80,000 = $163,522.80 - $80,000 = $83,522.80 total interest
Answered by linda
no my given answers are (a) $158,400.00 (b) $104,480.00 (c) $83,584.00 (d) $63,584.00 now which one is the given ics answer?
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