Find the interest paid on a 30-year mortgage of $350,000 at an APR of 6%.

Question

Quizplus · Accepted Answer

The interest paid on a mortgage can be calculated using the formula for the total payment on an amortizing loan. The total payment is calculated using the formula: M = P[r(1+r)^n]/[(1+r)^n – 1], where M is the total monthly payment, P is the principal loan amount ($350,000), r is the monthly interest rate (6% annual rate divided by 12 months), and n is the number of payments (30 years times 12 months per year). After calculating the total payment and subtracting the principal, the interest paid is $405,431.20.

Find the Interest Paid on a 30-Year Mortgage of $350,000