What total interest paid is calculated for a $250,000 loan at 10% over 20 years?

To find the total interest paid on a $250,000 loan at an interest rate of 10% over a period of 20 years, it's essential to consider the total amount that will be repaid, including both the principal and the interest accrued over the duration of the loan.

First, calculate the monthly payment using a standard mortgage formula. The monthly payment can be determined using the formula for an amortizing loan, which incorporates the loan amount, the interest rate, and the number of payments. The monthly interest rate would be the annual rate divided by 12 months, yielding (0.10 / 12 = 0.0083333).

The total number of payments for a 20-year loan is (20 \times 12 = 240).

By plugging these values into the amortization formula, the monthly payment comes out approximately to $2,415.

Next, multiply the monthly payment by the total number of payments to find the full repayment amount:

[

Monthly\ Payment \times Total\ Payments = $2,415 \times 240 = $579,600

]

To find the total interest paid, subtract the principal from the total amount repaid:

[

Total\ Interest = Total\ Rep