A Florida buyer pays $350,000 for a property. The buyer pays $70,000 down and finances the remainder. The monthly principal and interest payment is $1,495. After 5 years of payments (60 payments), the loan balance is $260,000. What is the total amount of interest paid in the first 5 years?

Explanation

Total payments in 5 years = $1,495 × 60 = $89,700. Original loan balance = $350,000 − $70,000 = $280,000. Principal paid = $280,000 − $260,000 = $20,000. Interest paid = Total payments − Principal paid = $89,700 − $20,000 = $69,700. The The answer C ($59,700) is the closest but the correct calculation yields $69,700.