A family is thinking about buying a new house costing 380 000$. They must pay 110 000$ down and the rest is to
be amortized over 25 years in equal monthly payments. If money
costs 7% compounded monthly
(A)What will their monthly payment be?
(B)What will be unpaid balance after 20 years?
(C)How much total interest will be paid over the 25 years?

a.) 1908.30

b.) 96373.15

c.)302491.15

unrounded answers below

Step-by-step explanation:

The amount that is to be loaned out is 380000-110000=270000

The effective montly rate is .07/12=.005833333

a.)

b.)

use what is called the prospective method (the outstanding loan balance at time n is equal to the present value of the remaining payments)

c.)

total paid= 1908.303833*12*25=572491.1499

amount of loan: 270000

Total interest paid:

572491.1499-270000=302491.1499

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