Answer:
= $153,524.40
Explanation:
First, we know that the Mortgage loan for the house = $230,000
Rate= 4.5%
Loan Period = 25 Years
Based on the known information, the formula for the monthly payment is as follows:
Monthly Payment = Amount Borrowed x [Mortgage rate / 1- (1 + Interest rate ) ∧-N]
N is the period, and since we are considering monthly rate Period = 12 Months x 25 years = 300 Months
Monthly Payment = $230,000 x [4.5%/12 / 1- (1 + 4.5%//12 ) ∧ -300]
Monthly Payment = $230,000 x [0.375% / 1- (1 + 0.375% ) ∧ -300]
= $1,278.4147
Step 2: Calculate the total payment
Total Payment = Total Months of Mortgage loan x Monthly Payment
= $1,278.4147 x (12 Months x 25 years)
= $1,278.4147 x 300 months
= $383,524.40
Step 3: Compute the Total Interest as Follows:
Total Interest = Total Payment - Mortgage Loan Amont
= $383,524.40 - $230,000
= $153,524.40
