A family borrowed $84,000 to buy a house. The loan was at 6.7% and for 15 years. The monthly payments were $741.00 each. (a) How much of the first month's payment was interest, and how much was principal? interest $ principal $ (b) What was the total amount paid over the 15 years?
A family borrowed $84,000 to buy a house. The loan was at 6.7% and for 15 years. The monthly payments were $741.00 each. (a) How much of the first month's payment was interest, and how much was principal? interest $ principal $ (b) What was the total amount paid over the 15 years?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PB: Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at...
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A family borrowed $84,000 to buy a house. The loan was at 6.7% and for 15 years. The monthly payments were $741.00 each.
(a) How much of the first month's payment was interest, and how much was principal?
(b) What was the total amount paid over the 15 years?
interest | $ |
principal | $ |
(b) What was the total amount paid over the 15 years?
Expert Solution
Step 1
The net payment is the total amount paid for principal over the life of a loan, interest assuming that you retain the loan to maturity and make only the monthly payments necessary.
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