Maggie buys a new home for $150,000. She gets a great loan with a 2.5% interest rate. If she plans on paying it back in 15 years, how much will she pay in total for her home?

Answer 1

First, we need to calculate the total interest Maggie will pay over 15 years. We can use the formula for calculating the total interest on a loan:

Total Interest = Principal x Rate x Time

Total Interest = $150,000 x 0.025 x 15
Total Interest = $150,000 x 0.375
Total Interest = $56,250

Now, we can calculate the total amount Maggie will pay for her home by adding the total interest to the principal:

Total Payment = Principal + Total Interest
Total Payment = $150,000 + $56,250
Total Payment = $206,250

Therefore, Maggie will pay a total of $206,250 for her home over 15 years.