anonymous 3 years ago Helpppp.? How do I solve this.?[: -Brett has a 30-year fixed rate mortgage for $112,500 with monthly payments of$603.92. The annual interest rate is 5%. What is the total cost of the principal and interest for this loan rounded to the nearest dollar?

1. whpalmer4

That's going to be the number of payments * the monthly payment. Number of payments is number of years * 12 months / 1 year * 1 payment / month

2. whpalmer4

The monthly payment is $c = \frac{Pr(1+r)^N}{(1+r)^N-1}$ where $$P$$ is the principal borrowed, $$r$$ is the monthly interest rate (expressed as a decima)l, which equals the annual interest rate (expressed as a decimal) divided by 12, and $$N$$ is the number of payments.

3. whpalmer4

Which we don't need to compute because the problem gives it to us! :-) Figure out the number of monthly payments in 30 years, multiply by the monthly payment, and round to the nearest dollar.