Who can do this Home Loan quesion, because i keep getting it wrong!!!!! (1 Viewer)

[Jess Bi]

This afternoon, i was doing my maths homework, Home loans gggrrr, i just dislike money problems lol

Heres the question:
Mr and Mrs Chackraberry need to borrow $100 000 to purchase a home. The interest rate charged by the bank is 7% p.a. Calculate the total interest paid if the loan is taken over each of the following terms:
a) $706.78 per month over a 25 year term
b)$775.30 per month over a 20 year term

Thanks! i really hope you can make me understand this!

JESS <3

 

[cal-]

for a, 706.78 x 25 x 12, then minus 100,000 from that to give you the interest?

or do you have to use one of those general annuity formulas?

 

[PC]

This afternoon, i was doing my maths homework, Home loans gggrrr, i just dislike money problems lol

Heres the question:
Mr and Mrs Chackraberry need to borrow $100 000 to purchase a home. The interest rate charged by the bank is 7% p.a. Calculate the total interest paid if the loan is taken over each of the following terms:
a) $706.78 per month over a 25 year term
b)$775.30 per month over a 20 year term

Thanks! i really hope you can make me understand this!

JESS <3

Mr & Mrs Chackraberry only have to worry about meeting their monthly payments. Each monthly payment will be partly paying off the principal and partly paying off the interest.

So:

(a) Total repaid = 706.78 x 25 x 12
= $212034
.: Interest = 212034 – 100000
= $112034

(b) Total repaid = 775.30 x 20 x 12
= $186072
.: Interest = 186072 – 100000
= $86072