If the monthly payment for a 10 year $20000 loan at 4.625% apr. the total interest paid on this loan is $5,020.
First step is to find the monthly payment (m) using this formula
M =P(r/12) (1+ r/12)^12t ÷ (1+ r/12)^12t -1
Where:
P= Principal
r = Interest rate
Let plug in the formula
M =20,000(0.04625/12) ( 1+ 0.04625/12)^12× 10
M =20,000(0.04625/12) ( 1+ 0.04625/12)^120
M= $208.5
Now let find the total interest paid
Total interest paid = ($208.5 × 120) - $20,000
Total interest paid = $5,020
Therefore the total interest paid is $5,020.
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