Rebecca takes out a $225000 mortgage in order to buy her first house. If the term of the loan is 25 years with a 3.75% annual interest compounded monthly and monthly payments, what is the total amount that she will pay in interest over the life of the loan? Give your answer correctly rounded to three significant figures.
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The formula for the monthly payment of a loan is: P = [r*PV] / [1 - (1 + r)^-n] where: P is the monthly payment r is the monthly interest rate (annual rate / 12) PV is the present value, i.e., the amount of the loan n is the number of payments (years * Show more…
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