To determine how much money will be spent in interest alone over the course of the 30-year mortgage with a 3% interest rate, let's follow this step-by-step solution:
1. Identify Given Information:
- Principal (the initial loan amount): \[tex]$200,000
- Monthly payment: \$[/tex]843
- Interest rate: 3%
- Loan term: 30 years
2. Calculate the Total Amount Paid Over 30 Years:
Each year has 12 months, so in 30 years, there are a total of 30 * 12 = 360 months.
Therefore, the total amount paid over the span of 30 years can be calculated by multiplying the monthly payment by the number of months:
[tex]\[
\text{Total Amount Paid} = 843 \times 360 = \$303,480
\][/tex]
3. Determine the Total Interest Paid:
The total interest paid over the life of the mortgage is the difference between the total amount paid and the principal:
[tex]\[
\text{Total Interest} = 303,480 - 200,000 = \$103,480
\][/tex]
Thus, the amount of money spent in interest alone over the course of the 30-year mortgage with a 3% interest rate is \$103,480.
