Suppose you buy a home and finance $275,000 at $2,223.17 per month for 30 years. What is the amount of interest paid? (Round your answer to

Question

Suppose you buy a home and finance $275,000 at $2,223.17 per month for 30 years. What is the amount of interest paid? (Round your answer to the nearest cent.)

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Linh Đan 3 years 2021-08-06T18:46:01+00:00 1 Answers 11 views 0

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    2021-08-06T18:47:57+00:00

    Answer:  $525,341.20

    Explanation:

    30 years = 30*12 = 360 months

    If the monthly payment is $2,223.17 for 360 months, then you’ll pay back a total of 2223.17*360 = 800,341.20 dollars overall.

    Subtract off the amount financed, or amount loaned, to get the total interest.

    800,341.20 – 275,000 = 525,341.20 is the amount of interest paid (in dollars).

    This works because effectively, the total amount paid back consists of principal + interest. The principal is the amount the bank loans you.

    So we could rephrase that last equation into saying

    principal + interest = 275,000 + 525,341.20 = 800,341.20 = total amount paid back.

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