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Camila has finally found a house she adores! The cost of the home is $210,000, which she intends to purchase on a 30-year fixed mortgage. Blinded by her adoration for the
property, she has agreed to a 5.5% interest rate. Round all answers to the nearest cent.
How much will Camila pay in interest over the lifetime of the mortgage?

It is a loan taken in order to purchase a property that requires periodic repayments such as monthly repayment since most mortgages are repaid monthly.

Our first task is to determine the monthly repayment using the present value formula of an ordinary annuity because the monthly payment becomes due at the end of each month.

PV=monthly repayment*(1-(1+r)^-N/r

PV=loan amount=$210,000

monthly repayment=unknown(assume it is X)

r=monthly interest rate=5.5%/12=0.00458333333333333

N=number of monthly payments in 30 years=30*12=360

$210,000=X*(1-(1+0.00458333333333333)^-360/0.00458333333333333

$210,000=X*(1-(1.00458333333333333)^-360/0.00458333333333333

$210,000=X*(1-0.19277525234572900)/0.00458333333333333

$210,000=X*0.80722474765427100/0.00458333333333333

$210,000=X*176.12176312456800000

X=$210,000/176.12176312456800000

X=monthly payment=$1,192.36

total repayments(360 months)=$1,192.36*360

total repayments(360 months)=$429,249.60

Total interest=total repayments(360 months)-loan amount

Total interest=$429,249.60-$210,000

Total interest=$219,249.60

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