Given:
Loan Amount: $190,000
Loan Terms: 30 years = 360 months = n (convert years to months)
Interest Rate: 7.44% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $1,320.71 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $1,320.71 * 360 = $475,455.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $475,455.60 – $190,000 = $285,455.60
Interest Cost is greater than the Loan Amount
Loan Amount: $190,000
Loan Terms: 30 years = 360 months = n (convert years to months)
Interest Rate: 7.44% =
7.44/100
= 0.0744 = r (convert percent to a decimal)Monthly Loan Payment Formula:
Monthly Loan Payment =
Loan Amount *
r
/
12
/
1 – ( 1+ r/12
) -n
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
190,000 *
0.0744
/
12
/
1 – ( 1+ 0.0744/12
) -360
Monthly Loan Payment = $1,320.71 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $1,320.71 * 360 = $475,455.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $475,455.60 – $190,000 = $285,455.60
Interest Cost is greater than the Loan Amount
