Rachel Davis buys a $20,000 property. She puts down $1,000, with the balance to be repaid over 20 years at 12% interest. Her monthly payments are $209.38.

What is the approximate amount of interest paid on the loan at its maturity?

approximate amount of interest paid $31,500

Explanation:

given data

buys property = $20,000

puts down = $1,000

interest = 12 %

time = 20 year = 20 * 12 = 240 months

monthly payments = $209.38

solution

we get here total payment will be = $209.38 * 240 monthly

total payment = $50,251.20

so amount of interest paid on loan at maturity will be as

amount of interest paid = total payment - buys property - puts down

amount of interest paid = $50,251.20 - $20,000 - $1,000

amount of interest paid = $31,251.20

so approximate amount of interest paid $31,500