Question
Suppose you take out a $351,980 mortgage at 12.3% interest compounded annually. How much interest will you have paid after 20 years?
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Answer to a math question Suppose you take out a $351,980 mortgage at 12.3% interest compounded annually. How much interest will you have paid after 20 years?
Timmothy
4.888 Answers
1. Calculate the amount using the compound interest formula:
A = P(1 + r)^n
where:
\( P = 351,980 \) (principal),
\( r = 0.123 \) (annual interest rate),
\( n = 20 \) (number of years).
Substitute the values into the formula:
A = 351,980(1 + 0.123)^{20}
A = 351,980(1.123)^{20}
A=3,581,897.156
2. Calculate the interest paid:
I = A - P
I=3,581,897.156-351,980
I=3,229,917.156
So, the interest paid after 20 years is
3,229,917.156
where:
\( P = 351,980 \) (principal),
\( r = 0.123 \) (annual interest rate),
\( n = 20 \) (number of years).
Substitute the values into the formula:
2. Calculate the interest paid:
So, the interest paid after 20 years is
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