Answer:
$563 850
Step-by-step explanation:
A. Monthly payment
The formula for the monthly payment (P) on a loan of A dollars that is paid back in equal monthly payments over n months, at an annual interest rate of i % is
[tex]P = A(\frac{i}{1-(1+i)^{-n}})[/tex]
Data:
We must express the interest rate on a monthly basis.
i = 5.475 %/yr = 0.456 25 %/mo = 0.004 5625
A = $543 000
n = 360 mo
Calculation:
[tex]P = 543 000(\frac{0.004 5625}{1-(1+0.004 5625)^{-360}})[/tex]
[tex]P = \frac{2477.34}{{1- {1.004 5625}}^{-360}}[/tex]
[tex]P = \frac{2477.34}{1 - 0.194 220}[/tex]
[tex]P = \frac{2477.34}{0.805 780}[/tex]
P = $3074.583
B. Total Payment (T)
T = nP
T = 360 × 3074.583
T = $1 106 850
C. Total Interest (I)
I = T – A
I = 1 106 850 – 543 000
I = $563 850
Andrew's total interest is $563 850.
