Help Please
You own a house, on which you pay a mortgage. Currently you owe 260,000 dollars on your mortgage, and your interest rate is 3.9 percent (this means that every year you pay interest on your debt amounting to 3.9 percent of what you owe). Your mortgage requires you to pay 1300 dollars every month. How much money do you pay to your mortgage company every year (in dollars)?

Question

Help Please
You own a house, on which you pay a mortgage. Currently you owe 260,000 dollars on your mortgage, and your interest rate is 3.9 percent (this means that every year you pay interest on your debt amounting to 3.9 percent of what you owe). Your mortgage requires you to pay 1300 dollars every month. How much money do you pay to your mortgage company every year (in dollars)?

anonymous · Answer

16208.40

anonymous · Answer

a year

anonymous · Answer

Hello

anonymous · Answer

hi

anonymous · Answer

do you understand how i did this

anonymous · Answer

16208.40 a year isn't correct.

anonymous · Answer

SeaBoi20 what do you need help with

anonymous · Answer

its 16208.40 sorry

anonymous · Answer

are there choices

anonymous · Answer

See I also got that answer by multiplying 1300*12 and then adding the 3.9% interest rate. But it is saying that it is not correct.

anonymous · Answer

how come that is what i did

anonymous · Answer

I don't know I am confused too.

anonymous · Answer

are there choices because I am confused what is this from

phi · Answer

Your mortgage requires you to pay 1300 dollars every month. How much money do you pay to your mortgage company every year (in dollars)? 
that means you pay 1300*12 per year or  15600 per year

what changes is how much of the original loan is being paid off.

anonymous · Answer

what is this from are there choices

anonymous · Answer

So phi you are saying that you should do 1300*12=15600. Then subtract that from 260,000 and then multiply the remainder by .039 and add that to 15600 to get the answer?

phi · Answer

How much money do you pay to your mortgage company every year (in dollars)? 
15600 per year

anonymous · Answer

Thanks phi!! Thats correct... So the other money is not actually paid its just added back in??

anonymous · Answer

16208.4

phi · Answer

the payment (of 1300) includes the interest plus principal.  The idea is you borrow a certain amount of money, they figure out how much to charge you for borrowing the money (for the length of the loan), and then come up with a payment per month to pay off the total amount.

anonymous · Answer

Thanks a lot. You are a legend!

phi · Answer

If you have time, see http://www.khanacademy.org/economics-finance-domain/core-finance/housing/mortgages-tutorial/v/introduction-to-mortgage-loans