Question

You can afford a $950 per month mortgage payment. You've found a 30 year loan at 8% interest. a) How big of a loan can you afford? b) How much total money will you pay the loan company? c) How much of that money is interest?

Answer 1

Answer:

129469.3194

342000

212530.6806

Step-by-step explanation:

Going to assume that the 8% is a nominal, montly rate

which means the effective monthly rate is .08/12= .006667

using the annuity immediate formula...

a.)

$950(\frac{1-(1+.006667)^{-30*12}}{.006667})=129469.3194$

b.) we would pay 950*30*12= 342000

c.) the amount in interest would be 342000-129469.3194=212530.6806