Correct answer is:Jamie's finance charges are about $6,26,128.20
Solution:-
Given that Jamie purchased a condo in Naples,Florida for $699,000.
She put 20% down and financed the remaining, that is she financed 80% of 699,000$= 0.8X699,000=$5,59,200
And interest rate = 5%=0.05 in decimals
Tenure = 35 years and payment is monthly.
The formula we need to use here is [tex]A=P\frac{(\frac{r}{n})}{1-(1+(\frac{r}{n}))^{-nt}}[/tex]
Where A is the monthly payment for 35 years
P=financed amount=$5,59,200
r=interest rate=0.05
n=number of compoundings per year=12
t=tenure=35 years
Hence [tex]A=5,59,200\frac{(\frac{0.05}{12})}{1-(1+\frac{0.05}{12})^{(-12*35)}}=2822.21[/tex]
So, she has to pay $2822.21 for 35X12=420 months which means she will pay 2822.21X420=$1,185,328.20
Hence finance charges= amount paid for 35 years- loan amount
=1185328.20-559200=$6,26,128.20
