If your parents borrowed $150,000 at 6% interest compounded monthly to purchase a house, the length of the loan is 30 years, and the monthly payment is determined to be $899.33;
How much interest did they pay over the 30 years?

Question

If your parents borrowed $150,000 at 6% interest compounded monthly to purchase a house, the length of the loan is 30 years, and the monthly payment is determined to be $899.33;
How much interest did they pay over the 30 years?

anonymous · Answer

I have the amortization formula... is that good enough?

dumbcow · Answer

don't need compound interest formula here

30 years = 360 months
360*899.33 = 323,758.80

subtract original loan amount and that is total interest paid

campbell_st · Answer

find the total repaid...  n = 30 x 12 = 360  r = 6/12 = 0.5%

then   Interest paid  = 150000(1 + 0.005)^360 - 150000