You are borrowing $300,000 for 20 years at 4%. Payments will be made monthly. What is the total amount of interest you will pay if you pay the loan as agreed over the 20 years?

Question

Quizplus · Accepted Answer

The total interest paid on a loan can be calculated using the formula for the total payment minus the principal. The monthly payment can be calculated using the loan amortization formula, and then multiplied by the total number of payments (240 in this case) to find the total payment. Subtracting the principal ($300,000) from this total gives the total interest paid, which is $136,306.

You Are Borrowing $300,000 for 20 Years at 4