Answer:
D. Less than $100,831
Step-by-step explanation:
There is an equation for calculating monthly payment:
x = p • r • (1+r)^n / (1+r)^n - 1
It may seem a bit complicated, but let's explain it step by step:
- p is the amount of loan, in this case $155,000
- r is monthly interest rate, in this case (4.4/12) / 100, which is 0.00367
- n is the number of months for paying back, or in this case 20 • 12 = 240
Now that we know all the values, all that's left is to plug them in and solve it on the calculator:
x = 155,000 • 0.00367 • (1.00367^240) / (1.00367^240) - 1
x = $972.27
So, the monthly payment is around $972.3. We now multiply it by the number of months to get total payment:
$973.3 • 240 = $233,352
So, the total amount, loan plus interest, is 233,352 dollars.
To only find amount of interest, we simply subtract loan from total amount:
$233,352 - $155,000 = $78,352
