Question

Please help!!

Artie is financing a condominium for $313,000. He gets a 30-year, fixed rate mortgage with a rate of 5.275%. How much interest will he pay over the life of his loan? Round to the nearest dollar.

Answer 1

This looks very familiar.

Answer 2

Didn't understand your explanation

Answer 3

Are you familiar with the formulas for compound interest, annualized payments, etc?

Answer 4

Before we get there, let me explain the thinking behind this problem.

Answer 5

Let's say I lend you $20.
Then you need to pay me back a payment of $6 in each of the next 4 weeks.
How much interest will you pay?

Answer 6

4$ in interest

Answer 7

Right. That's because by paying back 4 payments of $6, you pay back a total of $24. Then $24 - $20 = $4 which is the interest.

Answer 8

This problem is the same idea.
He gets a loan for $313,000 and pays a certain monthly payment for 30 years. That means he makes 360 monthly payments. If you multiply together the amount of one monthly payment and the number of payments, you find the total amount he paid. Then subtract $313,000 from the total to find how much he paid in interest.

Answer 9

Are you ok up to here?

Answer 10

Yes

Answer 11

Ok. The next step is to find the monthly payment.
You can either use the formula I gave you and use a calculator to compute it, or you can use an online mortgage payment calculator.

Answer 12

I'm sorry I only have another minute to do this these are the answer choices
$310,969
$382,044
$607,092
$623,969

Answer 13

First one.

Answer 14

The monthly payment ends up being $1,733.25
Then $1,733.25 * 360 = $623,969
Finally, $623,969 - $313,000 = $310,969

Answer 15

Thank you so much! I really appreciate you trying to explain it to me:)

Answer 16

wlcm