Calculate the Total Amount of Interest That Will Be Paid

question 114

Essay

Calculate the total amount of interest that will be paid on a $400 000 20-year loan with monthly repayments, given a loan interest rate of 6% p.a.compounding monthly.

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Definitions:

Price-earnings Ratio

A financial metric used to evaluate the value of a company's shares by dividing the current market price of a stock by its earnings per share.

Dividend Yield Ratio

A financial metric that shows how much a company pays out in dividends each year relative to its stock price.

Earnings per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability on a per-share basis.

Dividend Payout Ratio

The portion of net income distributed to shareholders in the form of dividends, expressed as a percentage of the company's total net income.