Question

On a home loan of $161,910 , with 30 year term with a fixed APR of 3.719%. calculate:
a). monthly payment
b). total amount paid for loan
c). total interest paid for loan

Answer 1

Answer a.

Amount borrowed = $161,910

Annual Interest Rate = 3.719%
Monthly Interest Rate = 3.719% / 12
Monthly Interest Rate = 0.30992%

Period = 30 years or 360 months

Let monthly payment be $x

$161,910 = $x/1.0030992 + $x/1.0030992^2 + … + $x/1.0030992^359 + $x/1.0030992^360
$161,910 = $x * (1 - (1/1.0030992)^360) / 0.0030992
$161,910 = $x * 216.750214
$x = $746.99

Monthly payment = $746.99

Answer b.

Total amount paid = $746.99 * 360
Total amount paid = $268,916.40

Answer c.

Total interest paid = $268,916.40 - $161,910.00
Total interest paid = $107,006.40