math help pls asap

Question

The median home price of a house in California in 1990 was $220,000. Jocelyn

paid 10% of the cost of the house with the money she’d saved. She had to borrow the

rest of the money from the bank to pay for the house. The bank gave her a 4%

interest rate per year because she had reasonably good credit.

a) Find how much Jocelyn ended up having to pay the bank back if the loan

was compounded monthly for 30 years.

Answer 1

We'll have to use our compound interest equation to solve this one! A = P(1 +r/n)^nt

Where A = final amount, P = principal balance, r = interest rate (4% or 0.04), n = number of times the interest is compounded each year, and t = time in years.

Since we're told she 10% of the $220,000 with her savings, that means she only took out a loan for $198,000 (220,000 - 22,000 = 198,000). Since the interest compounds monthly, we know that "n" must be 12 in our equation. So we can set up our equation as follows:

A = 198,000(1 + 0.04/12)^(30*12) = 198,000(1.003333)^360

Working out this equation gives us a final amount paid of $656,072.61

A pretty expensive mortgage if you ask me!