Question

You recently purchased a new home for $275,000 by agreeing to make annual payments for 15 years; if the interest rate on the loan is 4 percent, what is the total amount of interest you will pay over the life of the loan?

Answer 1

	For Calculating Interest, first of all, we need to calculate the annual payment amount
	for which formula is
		= [P x R x (1+R)^N]/[(1+R)^N-1]
		Where,
		P= Loan Amount
		R= Interest rate per period
		N= Number of periods
		=[$275000*0.04*(1+0.04)^15]/(1+0.04)^15 -1
		=$24733.80
	Now let us total interest to be paid
		= Total Amount Paid - Loan Amount
		=($24733.80*15 years) -275000
		$ 96,007.00
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