jakes house costs about 120000. with 5% interest overe 30 years how much will his mortgage cost him?
+23254 If it were simple interest, you would use the formula i = P·r·t
where i = interest, P = principal (amount borrowed), r = rate (as a decimal)
and t = time (years) ---> i = 120000(.05)(30) = $180,000.00.
However, that is unrealistic.
Paying off a house loan is done monthly, so you need to use a compound interest formula to find the monthly payment.
The monthly payment will be $644.19 (using an online calculator for home loans).
Paying this monthly for 30 years:
$644.19 (per month) x 12 (months per year) x 30 (years) = $231,908.40
Since $120,000.00 was borrowed, $231,908.40 - $120,000.00 = $111,908.40 will be the amount of interest paid.
+23254 If it were simple interest, you would use the formula i = P·r·t
where i = interest, P = principal (amount borrowed), r = rate (as a decimal)
and t = time (years) ---> i = 120000(.05)(30) = $180,000.00.
However, that is unrealistic.
Paying off a house loan is done monthly, so you need to use a compound interest formula to find the monthly payment.
The monthly payment will be $644.19 (using an online calculator for home loans).
Paying this monthly for 30 years:
$644.19 (per month) x 12 (months per year) x 30 (years) = $231,908.40
Since $120,000.00 was borrowed, $231,908.40 - $120,000.00 = $111,908.40 will be the amount of interest paid.
