Question

Amara has taken out a fixed rate mortgage for $125,000 at 4.04% for 20 years, or 240 months. Her payments are $730. What is the total cost of the loan? $130,050 $175,200 $211,680 $226,000

Answer 1

Answer:

`175,200$

Explanation:

730x240= Answer

Answer 2

The total cost of the loan if the monthly payment is $730 will amount to $175,200 at an interest rate of 4.04% for 240 months.

What is monthly payment?

A repayment of a loan or an advance taken that is done on regular monthly intervals is known as monthly payment. The monthly payment is chargeable with interest and for a fixed and predetermined period.

The monthly payment in the given situation is $730 for a period of 240 months. So, the total cost of the loan will be calculated as,

$\rm Total\ Cost\ of\ Loan= Monthly\ Payment\ x\ No.\ of\ Months\\\\\rm Total\ Cost\ of\ Loan= 730\ x\ 240\\\\\rm Total\ Cost\ of\ Loan= \ 175,200$

Hence, option B holds true regarding the monthly payments.

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