00:01
A home mortgage of 400 ,000 with a fixed apr of 3 .5 % for 30 years.
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While to calculate the monthly payments, determine the total amount paid over time or the term of the loan and of the total amount paid, 1 % is paid towards the principal and 1 % is paid for the interest.
00:24
The formula for the monthly payment is p times r over 1 plus r raised to the power of n minus 1.
00:41
P is 400 ,000 and time is n, which is 30 years.
00:49
So 30 times 12 months which is 360 months and the rate is 3 .5%.
00:54
If we divide it by 12, we're going to have 0 .035.
01:00
So we substitute the values in the formula and this should be 400 ,000 times 0 .035 over 12 times 1 plus 0 .035 divided by 12 raised to the power of 360.
01:19
And this is divided by 1 plus 0 .035 divided by 12 raised to the power of 360 minus 1.
01:32
So this will give us a monthly payment of 1796 .18 approximately.
01:42
So that's just the first part.
01:43
Now the total amount paid over the loan, over the term of the loan would be 1796 .18 times 12 period months times 30 years...