Question

Tori took out A $350,000 loan in order to purchase a house. She has to pay an interest of 5.2% over 35 years. how much interest does she owe? What is the total Amount that tori has to pay back At the end of the 35 years? Tori wants to build a budget To help organize your finances. To pay off her loan, how much does Tori need to pay monthly ? Justify how you got your answer using mathematical terms and reasoning?

Answer 1

Hello from MrBillDoesMath!

Answer:

Interest paid = $ 1,713,568.73

Monthly p[payment = $4913.25

Discussion:

From the "compound interest formula:

A = final amount

P = Initial amount (Principal)

r = yearly interest rate

n = number of years of accumulation.

In our case,

A = 350000( 1 + .052)^35 =

      350000 (5.90)  =                  (approx)

      $2,063,568.73

Interest =  $2,063,568.73 - 350000 =  $ 1,713,568.73

There are 35 *12 = 420 months in 35 years. So the monthly payment would be   ($2,063,568.73 / 420)  = $4913.25

Thank you,

MrB