Answer:
Interest payment= $ 102,176.54
Explanation:
When a loan is to be paid over a period of time using a series of periodic equal installments, it is called loan amortization. Each equal installment is meant to liquidate the principal and the accrued interest.
Total Interest payment = total payment over the loan life - Principal amount
The monthly equal installment is calculated as follows:
Monthly equal installment-= Loan amount/Monthly annuity factor
Monthly annuity factor
=( 1-(1+r)^(-n))/r
Monthly interest rate (r)
= 4.25%/12= 0.354 %
Number of months ( n) in 30 years
= 12* 30 = 360
Annuity factor
= ( 1- (1.00354)^(-360)/0.00354= 203.3252575
Monthly installment = 132,600/47.03 = $652.157
Total Interest payment = total payment over the loan life - Principal amount
= (652.157 × 360) - 132,600= 102,176.54
Interest payment= $ 102,176.54
