You borrow $149,000 to buy a house. the mortgage rate is 7.5% and the loan period is 30 years. payments are made monthly. if you pay for the house according to the loan agreement, how much total interest will you pay?

Hi there
First find the monthly payment by using the formula of the present value of annuity ordinary
The formula is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 149000
PMT monthly payment?
R interest rate 0.075
K compounded monthly 12
N time 30 years
We need to solve the formula for PMT
PMT=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
PMT=149,000÷((1−(1+0.075÷12)^(
−12×30))÷(0.075÷12))
=1,041.83

Second find how many months in 30 years
12×30=360 months

Now find how much interest will be paid
1,041.83×360−149,000
=226,058.8answer

Good luck!

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