RatedrillTotal interest over the loan
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
You borrow $105,000 for 30 years at 4.25% APR with monthly payments. Using the payment rounded to the cent, how much interest do you pay over the life of the loan?
What this problem teaches
Compute PMT, round it to the cent, then multiply by N and subtract the loan. Set P/Y = C/Y = 1, so I/Y is the rate per period. Cash you pay out is negative and cash you receive is positive.
A hint if you get stuck
Find the monthly payment, multiply by the number of payments, then subtract the amount borrowed.
This problem is part of Pro
Pro unlocks all 53 problems, with worked solutions and progress saved to your account. The free problems work without an account.
You create a free account first, so Pro is attached to it.
Monthly is charged today and then every month until you cancel, in one click from your account page. Lifetime is one payment with no renewals. Full refund within 14 days of paying.