Jake just got a​$96000mortgage in order to buy a new​ home, and he was able to get a 30 year loan at​ 5.5% interest. Answer the following questions about​ Jake's loan.​(Round your answers to the nearest​ cent.) What is​ Jake's monthly​ payment?  ​$nothing How will Jake pay in total over the lifetime of the​ loan?  ​$nothing How much interest will Jake pay over the lifetime of the​ loan?  ​$

Question
Asked Nov 7, 2019
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Jake just got a
​$96000
mortgage in order to buy a new​ home, and he was able to get a 30 year loan at​ 5.5% interest. Answer the following questions about​ Jake's loan.
​(Round your answers to the nearest​ cent.)
 
What is​ Jake's monthly​ payment?  
​$nothing
 
How will Jake pay in total over the lifetime of the​ loan?  
​$nothing
 
How much interest will Jake pay over the lifetime of the​ loan?  
​$
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Expert Answer

Step 1

Loan Amount (pv) = $96,000

Interest Rate (rate) = 5.5%

Time Period = 30 Years

Number of Payments in a Year = 12

Total Number of Payments (nper) = 30 Years × 12 = 360

 

Calculation of Monthly Payment of the loan by using PMT function of excel:

To open the "PMT function" window - MS-Excel --> Formulas --> Financials --> PMT.

=PMT
PMT(rate, nper, pv, [fv], [type])
PMT(5,5%/12,360,-96000)
$545.08
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=PMT PMT(rate, nper, pv, [fv], [type]) PMT(5,5%/12,360,-96000) $545.08

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Step 2

Monthly Payment = $545.08

Time Period = 30 Years

Number of Payments in a Year = 12

Total Number of Payments = 30 Years × 12 = 360

 

Calculation of the future value of the loan is as follows

Future Value of the Loan = Monthly Payment x Total Number of Payments
=$545.08 x 360
$196, 228.80
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Future Value of the Loan = Monthly Payment x Total Number of Payments =$545.08 x 360 $196, 228.80

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Step 3

Loan Amount = $96,000

Future Value of the Loan = $196.228.80

 

Calculation of th...

Total Interest Future Value of the Loan - Loan Amount
=$196,228.80-$96,000
$100,228.80
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Total Interest Future Value of the Loan - Loan Amount =$196,228.80-$96,000 $100,228.80

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