Help! Math question about total interest.

Question

Constance Hairston obtains a 30-year, $133,750 mortgage at 12% on a house selling for $159,000. Her monthly payment, including principal and interest, is $1376.29. How much of the total cost will be interest?

Answer 1

Hi Anthony.

 The first thing we need to do is calculate the total amount paid.  A payment is made once per month for 30 years, so the total number of payments is 30 x 12 = 360

 

So the total amount paid is $1376.29 x 360 = $495,464.40

The total amount of her mortgage is $133,750, so we need to subtract that amount from the total amount paid to determine how much is interest:

$495,464.40 - $133,750 = $361,714.40

So the total interest paid on the loan is $361,714.40