Given:
Loan amount = $250000
Interest rate = 5.5%
Interest payment = $2042.71
To find:
Total amount of interest
Solution:
The total number of months in 15 years = [tex]15\times12=180\text{ years }[/tex]
Total monthly payments will be [tex]180\times \$2042.71 = \$367687.8[/tex]
So, the total pay-backs will be $3,67,687.8
Total interest paid will be as follows,
[tex]\text{Total interest paid = Total pay-backs - Loan amount}[/tex]
On plugging-in the values in the above formula we get,
[tex]\Rightarrow \$3,67,687.8-\$250,000=\$1,17,687.80[/tex]
Therefore, the total amount of interest that the borrower will pay over the course of the loan is $1,17,687.80.
