A family borrowed $84,000 to buy a house. The loan was at 6.7% and for 15 years. The monthly payments were $741.00 each. (a) How much of the first month's payment was interest, and how much was principal? interest     $  principal     $  (b) What was the total amount paid over the 15 years?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A family borrowed $84,000 to buy a house. The loan was at 6.7% and for 15 years. The monthly payments were $741.00 each.

(a) How much of the first month's payment was interest, and how much was principal?
interest    
principal    

(b) What was the total amount paid over the 15 years?
 
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The net payment is the total amount paid for principal over the life of a loan, interest assuming that you retain the loan to maturity and make only the monthly payments necessary.

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