Sam takes out a $167,000 mortgage for 20 years. he makes monthly payments and at the end calculates
that he has paid $240,141 towards the mortgage. what is the approximate apr?
apr = __2nf
r
p
(n+1)
3%
0
6%
0
0
7%

The Annual rate of interest for the mortgage is 1.8%

Step-by-step explanation:

Given as :

The mortgage principal = p = $167,000

The time period of mortgage = t = 20 years

The Amount paid towards mortgage in 20 years = A = $240,141

Let the Annual percentage rate on interest = r % compounded annually

Now, From Compound Interest method

Amount = Principal ×

Or, A = p ×

Or, $240,141 = $167,000 ×

or, =  

Or , 1.437 =  

Or, =

or, 1.018 =

Or, =  1.018 - 1

Or, = 0.018

∴ r = 0.018 × 100

i.e r = 1.8

So, The rate of interest applied = r = 1.8 %

Hence, The Annual rate of interest for the mortgage is 1.8%  Answer

yes

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