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To purchase studio space, on April 3, 2025 a pianist takes out a 30-year loan of $120,000 at an annual interest rate of 11%.
To purchase studio space, on April 3, 2025 a pianist takes out a 30-year loan of $120,000 at an annual interest rate of 11%. The first monthly payment is to be made on May 3, 2025; the final payment is scheduled to be made April 3, 2055. The monthly payment is $1,142.79.
[Note: If you use the table you'll get that the monthly payment is $1,142.40, but the table produces an approximation. $1,142.79 is the precise payment.]
a) Calculate the total interest charged over the course of the loan, assuming that nothing but the
standard payment is made each month.
b) How much will she owe immediately after making the payment on June 3, 2025? (= the
second payment) Round appropriately to the nearest penny.
c) Suppose that as part of that June 3, 2025 payment she pays an extra $300 as an overpayment.
Calculate the dollar amount of interest which this saves in the future. Round your answer down to the nearest $10.
