Question

(I understand how to get all the inputs and solve for the PMT, i just can't seem to figure out where to plug the p1 or p2 numbers into my ti-84 calculator to get that $188,264.78. Is there an easier way to figure this number out? or if you know how to plug it in to a ti-84 like calculator that would help a ton. Thanks!)

Question:

A home buyer bought a house for $245,000. The buyer paid 20 percent down but decided to finance closing costs of 3 percent of the mortgage amount. If the borrower took out a 30-year fixed-rate mortgage at a 5 percent annual interest rate, how much interest will the borrower pay over the life of the mortgage?

Calculator Solution:
Amount borrowed is 0.8 × $245,000 = 196,000
Points to be financed 0.03 × 196,000 = 5,880
PV = 201,880
N = 360
FV = 0
I = 5/12 = 0.4167
Solve for PMT to get $1,083.74; in the amortization schedule of the financial calculator, use P1 = 1 and P2 = 360 to find the total interest paid for this loan, which is $188,264.78.

Answer 1

You can compute the way below:

TOtal interest paid for the life of the loan=1083.74*360-196000-5880=188264.78