The total interest is $107,270
What is monthly payment formula?
The formula for monthly payment is:
![M = \frac{P(\frac{r}{12})( 1+\frac{r}{12})}{( 1+\frac{r}{12})^n-1}](https://tex.z-dn.net/?f=M%20%3D%20%5Cfrac%7BP%28%5Cfrac%7Br%7D%7B12%7D%29%28%201%2B%5Cfrac%7Br%7D%7B12%7D%29%7D%7B%28%201%2B%5Cfrac%7Br%7D%7B12%7D%29%5En-1%7D)
We can find total interest as shown below:
Value of property = $475,000
Money available as a deposit = $80,000
P = 475,000-80,000
= 395000
t = 25 year
r = 2% = 0.02
n = 25*12 = 300
![M = \frac{P(\frac{r}{12})( 1+\frac{r}{12})}{( 1+\frac{r}{12})^n-1}](https://tex.z-dn.net/?f=M%20%3D%20%5Cfrac%7BP%28%5Cfrac%7Br%7D%7B12%7D%29%28%201%2B%5Cfrac%7Br%7D%7B12%7D%29%7D%7B%28%201%2B%5Cfrac%7Br%7D%7B12%7D%29%5En-1%7D)
Putting the value of P, t, r, and n in the above formula
![=\frac{395000(\frac{0.02}{12} )(1+\frac{0.02}{12}) }{(1+\frac{0.02}{12})^{300}-1}](https://tex.z-dn.net/?f=%3D%5Cfrac%7B395000%28%5Cfrac%7B0.02%7D%7B12%7D%20%29%281%2B%5Cfrac%7B0.02%7D%7B12%7D%29%20%7D%7B%281%2B%5Cfrac%7B0.02%7D%7B12%7D%29%5E%7B300%7D-1%7D)
after solving the above expression
M = $1674.22
Interest = M*n-P
Putting the value of P, n and M
= 1674.22*300-395000
= 502266-395000
= 107,266
Rounding to nearest ten dollar
= $107,270
Hence, the total interest is $107,270.
Learn more about Mortgage here:
brainly.com/question/24188673
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