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?
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
Section: Chapter Questions
Problem 1PS
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Question
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?
(b) What was the total amount paid over the 15 years?
| interest | $ |
| principal | $ |
(b) What was the total amount paid over the 15 years?
Expert Solution
Step 1
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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