Some friends tell you that they paid $14,773 down on a new house and are to...

Some friends tell you that they paid $14,773 down on a new house and are to pay $769 per month for 30 years. If interest is 6.3% compounded monthly,what was the selling price of the house?How much interest will they pay in 30 years?

Expert Solution

We need to find the present value of the monthly payment first, and then add the down payment to get the selling price of the house

PMT = 769

n = 30 * 12 = 360

r = 6.3%/12

r = 0.00525

Selling price = PV + Down payment

Selling price = 124,238.0946468953 + 14,773

Selling price = $139,011.0946468953

Interest to pay = PMT * n - PV

Interest to pay = 769 * 360 - 124,238.0946468953

Interest to pay = $152,601.9053531047

jeff jeffy answered 2 years ago

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Some friends tell you that they paid $14,773 down on a new house and are to...

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