Question

The Henley's took out a loan for $195,000 to purchase a home. At a 4.3% interest rate

Answer 1

Interest paid after 30 years is $494,546.99.

Solution:

Principal (P) = $195,000

Interest rate (r) = 4.3%

Time (t) = 30 years

n = number of times interest calculated per year

n = 1

Compound interest formula:

$A=P\left(1+\frac{r}{n}\right)^{n t}$

where A is the final amount

$A=195000\left(1+\frac{4.3\%}{1}\right)^{1\times 30}$

$A=195000\left(1+\frac{4.3}{100}\right)^{30}$

$A=195000\left(\frac{100+4.3}{100}\right)^{30}$

$A=195000\left(\frac{104.3}{100}\right)^{30}$

A = 689546.99

Interest = Amount  - Principal

             = 689546.99 - 195000

             = 494546.99

Interest paid after 30 years is $494,546.99.