Shawn bought a home for 100000 he put 20 percent down and obtained a mortgage fo 30 years at 5 5 percent what is the total interest cost of the loan?

Answer 1

Since Shawn bought the house for 100,000 and paid 20,000 (he put 20% down), the loan amount would be 80,000 (100,000 - 20,000). In order to find the total interest cost of the loan, first we need to find the balance that would be after 30 years with a 5.5% interest, and subtract from that balance the loan amount of 80,000:

A = Pert

A = 80,000e(0.055)(30)

A = 416,558.39

I = A - 80,000 = 416,558.39 - 80,000 = 336,558.39

Thus, the house would cost 336,558.39 more than the price of the house, if Shawn would buy it in cash.