Question

Mortgage paymentsPrincipal: $210,000.00Interest MonthlyRate Payment3%$8853.5%$9434.25% $1033How much money willbe spent in interest aloneover the course of the4.25% 30-year mortgagedescribed in the table?A. $8,925B. $161,880D. $210,000C. $371,880

Answer 1

First we will solve for the total money that will be paid back (on the 4.25% plan) over 30 years, which will be:

$\begin{gathered} =30\times12\times\text{ \ 1033} \\ =\text{ \ 371,880} \end{gathered}$

Now, we will find the money spent on interest alone thus:

$\begin{gathered} =\text{ \ 371880 - \ 210,000} \\ =\text{ \ 161,880} \end{gathered}$

The correct answer is option B.