Question

Kandy is financing a $335,000 mortgage for 30 years at a fixed rate of 7.45%. What is the total cost of the principal and interest after 30 years?
$368,200.50
$719,915.00
$557,276.40
$839,127.60

Answer 1

well what do you think you do first :)

Answer 2

Well, obviously I'd put everything in the formula.. But when I do, and I use a calculator to find the answer; it does not come up with one fo the choices. :\

Answer 3

find it piece by piece.
when you are taking the "power" on the calculator, make sure you use proper paranthesis

Answer 4

solve the numerator first then the denominator and then divide

Answer 5

better yet, what's the formula :)

Answer 6

@RONNCC
http://openstudy.com/users/glittermayhem#/updates/5171c1d5e4b0aca440e036c2

Answer 7

oh thanks @electrokid ~ you should continue this then :) .

Answer 8

@GlitterMayhem you can show me each piece and proceed

Answer 9

what did you get for \[(1+0.0745)^{12\times30}=?\]

Answer 10

I am pretty sure I typed it right. But, if you wouldn't mind checking that for me.
Usually it's typed in like this:
335,000*(0.006*(1+0.006)^(12*30))/((1+0.006)^(12*30)-1)
Which equals out to: 378990.08

Answer 11

where did you get the 0.006?

Answer 12

the rate is \[7.45\%=0.0745\]

Answer 13

It's 0.0745 divided by 12.. That is what the lesson told me to do. I do not understand why.

Answer 14

because the rate is annual and the motagage payments are "12" times per year

Answer 15

so, the interest per month is 1/12 th of the APR

Answer 16

Oh okay. That makes sense.

Answer 17

wait.. but look you've used the wrong formula for the question!!

Answer 18

What do you mean wrong formula? That is the only formula I was given in the lesson..?

Answer 19

we are asked the future value for the loan

Answer 20

It asks for the total cost. Meaning, all the interest. Or so I thought?

Answer 21

yes.
so, this is only a part of the solution.
monthly payment = 2274.

total payment made in 30years = 2274 * 12 * 30 = ?

Answer 22

infact, the monthly interest is 2252.69

Answer 23

810,968.40?
That is not a choice though.

Answer 24

when you do \[{0.0745\over12}=0.00621\]
you'd get it around 839K

Answer 25

Really? I swear I have tried everything.. Let me see if I get the same answer on my calculator. If not, perhaps I am still typing something wrong.

Answer 26

use this interest and find the "monthly payments"
you should get that as 2331.37

Answer 27

I got 2078.79
Grr.. Usually I am great with math, this is so frustrating.

Answer 28

haha. take a chill pill and tackle it in an hour

Answer 29

The assignment is due tomorrow. I've been trying to get this done for 3 days.
I do thank you for your help; it is greatly appreciated. I just cannot seem to grasp this.

Answer 30

your expression in the calculator that you showed above is correct. just change the 0.006 to 0.00621

Answer 31

So, I am not suppose to round the number so early on?

Answer 32

yes. since the number already is quite small and you are raising it to a great exponent power.

Answer 33

so, small changes would manifest as huge errors

Answer 34

keeping "3" significant figures is the rule of thumb

Answer 35

did you get the number?

Answer 36

I got 79615.44?

Answer 37

nope. I gave the monthly payment value above

Answer 38

i=0.00621
P=335000
n=12
t=30

Answer 39

Okay. So monthly interest rate is 2331.37.. What do I do from there?

Answer 40

Times it by 12 then 30?

Answer 41

this much you pay 12 times a year for 30 years

so, in all, you end up paying
2331.37*12*30=

Answer 42

Then I get 839,293.20.

Answer 43

yep

Answer 44

It's off by a few numbers. But it is the closest I have gotten yet to any of the answers.

Answer 45

yes. tink of the good service the bank provided for 30 years and you gave a tip for 100$

Answer 46

I guess so. Thank you so much.
I still have 2 other problems on this assignment that I do not understand.

Answer 47

hmm.. post em. There are many more smartys out here

Answer 48

Hm. I'll try. Thank you again :)