In: Finance
.Q. You purchase a home for $275,000 with a 10% down payment. You take out a 30-year mortgage loan at 4.35% interest. What is the total amount of interest paid in the first 4 years? Round to the nearest 0.01.
Loan amount = Price of Home*(1- % of downpayment) = $275,000*(1-0.10)
Loan amount = $247,500
No of Loan payments = 30 years*12 months = 360
Monthly Interest rate = APR/12 = 4.35%/12 = 0.3625%
No of payments made in 4 years = 4 years*12 = 48
Calculating the Total Interest amount paid in the first 4 years using excel "CUMIPMT" function:-
So, the total amount of interest paid in the first 4 years is $41,616.29
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