When we pay off a loan using monthly payments, we pay more than the loan was originally worth because of interest. To calculate how much the loan costs in total, we multiply the monthly payment and the number of payments made. The following video will show an example of this and how to calculate it using Excel.
Total Cost of Loan Given Payment
Video Source (04:09 mins) | Transcript
Total cost = Monthly payment × Total number of payments
- If you pay \($1074\) each month on your home mortgage for 30 years, how much will you pay in total for the home? (Solution
- If you pay \($367\) each month for five years to buy your car, how much is the total cost of the loan on the car? (Solution
- If you pay \($27.52\) each month for your cell phone for two years, how much is the total cost of your cell phone? (Solution
- If you pay your friend \($12\) each month for nine months to repay a loan, what is the total cost of the loan? (Solution
- If you pay the credit card company \($59.75\) each month in order to pay off your credit card, and it takes you 68 months to pay it off, what is the total cost of the credit card loan? (Solution
- If you have a small business loan and you pay \($1850\) each month for 10 years on the loan, what is the total cost of the loan? (Solution
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