Answer:
The Annual rate of interest for the mortgage is 1.8%
Step-by-step explanation:
Given as :
The mortgage principal = p = $167,000
The time period of mortgage = t = 20 years
The Amount paid towards mortgage in 20 years = A = $240,141
Let the Annual percentage rate on interest = r % compounded annually
Now, <u>From Compound Interest method</u>
Amount = Principal ×
Or, A = p ×
Or, $240,141 = $167,000 ×
or, =
Or , 1.437 =
Or, =
or, 1.018 =
Or, = 1.018 - 1
Or, = 0.018
∴ r = 0.018 × 100
i.e r = 1.8
So, The rate of interest applied = r = 1.8 %
Hence, The Annual rate of interest for the mortgage is 1.8% Answer