Question

View the Amortization Table and use it to answer each

question.

According to the amortization table, Demarco and

Tanya will pay a total of

in interest over the

life of their loan.

This means their total cost, including the $170,000

purchase price, is approximately

Answer 1

Interest for the first month equals (Interest rate/number of payments)*$170000.Interest payments for every month of repayment plus $170,000 equals the total cost of the loan.

In addition to the principal borrowed, interest is the fee you pay to get a loan from a bank.The principal amount, loan terms, repayment schedule, repayment amount, and interest rate are all factors that impact how much interest is paid.The interest paid is equal to the principal borrowed times the annual percentage rate of interest.The interest is divided by the number of payments made during the year.

while monthly instalments are divided by 12.The interest rate to be paid for that month is calculated by multiplying it by the loan balance in the first month, which is your principal amount.You will have a new loan balance of = Principal – (repayment-interest).Do this for as long the loan is expected to last.To get the overall cost of the loan over the course of the loan, add all interest payments to the principal borrowed.

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