Calculate Interest Paid on Home Loan?

I can%26#039;t seem to remember the compound interest formula to calculate the interest/total amount repaid on a home loan.

I want to borrow $320,000 from the bank over 30 years, with monthly repayments. Let%26#039;s pretend a constant interest rate of 8%.

Any help would be greatly appreciated (especially if you could show me the formula - not just the answer).

Calculate Interest Paid on Home Loan?car loan

The formula for *continuous* interest is:

A = P * e^(r * t)

Where:

A = Amount (This is the total amt paid over the life of the loan)

P = Principal (Amount borrowed = $320,000)

e = Natural log (2.71828)

r = Annual interest rate (8%)

t = Number of years (30)

Let%26#039;s plug in those values:

A = P * e^(r * t)

A = $320,000.00 * (2.71828)^(.08 * 30)

A = $320,000.00 * (2.71828)^(2.4)

A = $320,000.00 * (11.0232)

A = $3,527,416.44 (about 3.5 million dollars)

Using an online calculator, the answer is they give is:

$3,533,606.93 (Differences are due to rounding).

http://tcalc.com/tvwww.dll?User?Tmplt=fv...

The above amount is what you would owe if you made *no payments* in 30 years.

Now, if you want to calculate your balance on a daily basis,

you%26#039;ll have to express time as a decimal,

then subtract your payment.

Be prepared to carry out the decimals as far as possible

for an accurate balance.

----------------

The formula for *compound* interest is:

A = P * [1 + (r / n)]^(n * t)

Where:

A = Amount

P = Principal (amount deposited)

r = annual interest rate

n = number of times compounded in one year

t = number of years

However, the formula for compound interest won%26#039;t help you too much, but I%26#039;ve included it anyway. Banks use the *continuous* interest formula when determining how much you owe them.

You can find many online calculators which will answer your question. Try googling %26quot;home loan%26quot; + %26quot;online calculator%26quot;.

Good luck,

~ Mitch ~

Calculate Interest Paid on Home Loan?

loan

You%26#039;re welcome, and thanks for the stars!

I%26#039;m not a math genius, nor do I play one on TV.

I just enjoy working with numbers.

Best of luck,

~ Mitch ~ Report It

|||Formula used is incorrect for problem; monthly pmnts are ignored. Try this instead:

I=P*r*n/(1-(1/(1+r)^n)-P

I=interest (?)

P=loan amt. ($320,000)

r=I rate for period (8% APR or 0.67% / mo.)

n=# of periods (360 mo.)

so I=$525,296.79

total cost ~ $845,300!

Srry no detail...300 chr lmt :-) Report It

|||Should be able to find a mortgage calculator on line.