Respuesta :
The interest paid is $133,443.23 over the life of $200,000 loan, 30 years at 3.75%, assuming no prepayment.
Give a brief account on EMI.
Equated monthly installments (EMIs) are fixed payments made by a borrower to a lender on a particular day each month. In order to pay off the loan in full over a predetermined number of years, equal monthly installments are applied to the principal as well as interest each month. The borrower pays regular periodic payments to the lender over a number of years to pay off the loan in the most popular loan forms, including mortgages on real estate, vehicle loans, and student loans. Unlike variable payment plans, which allow the borrower to pay larger amounts as desired, EMIs are fixed payments. Borrowers participating in EMI plans often may only make one set monthly payment.
To solve :
The EMI formula is :
EMI = P × r × (1 + r)^n / ((1 + r)^n – 1)
= 200,000 × 3.75% × (( 1 + 3.75/ 100 × 12 ) ^ 30 × 12) / (( 1 + 3.75/ 100 × 12 ) ^ 30 × 12) - 1
= 926.23
So, amount paid = 926.23 × 360
333,443.23
So, interest paid,
= 333,443.23 - 200,000
= $133,443.23
The interest paid is $133,443.23.
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