Question

Maria takes out a $135,000 mortgage at 4.9% and plans to pay it back in 15 years. Her monthly payment is $1,061. What proportion of the total loan payments Maria makes goes to interest?

Answer 1

ANSWER:

$\frac{311}{1061}$ th proportion of the total loan payments Maria makes goes to interest

SOLUTION:

Given, Maria takes out a $135,000 mortgage at 4.9%  

And plans to pay it back in 15 years.  

Her monthly payment is $1,061.  

We need to find what proportion of the total loan payments Maria makes goes to interest?

Now, let us find the total payment made by her.

Total payment = monthly payment $\times$ 12 months $\times$  15 years

= 1061 x 12 x 15  = 190980

Now,  

Interest amount for 15 years = total payment – mortgage amount taken by her.

= 190980 – 135000  = 55980

Now, proportion of interest = $\frac{\text { interest paid }}{\text { total loan payments }}$

$=\frac{55980}{190980}=\frac{311}{1061}$

Hence $\frac{311}{1061}$ th proportion of the total loan payments Maria makes goes to interest