Question: In this module, you have computed the monthly payment for the amortization of a loan by using an amortization payment factor as given in a

In this module, you have computed the monthly payment for the amortization of a loan by using an amortization payment factor as given in a table. Now, consider a loan anywhere from 10 to 30 years. Given the relevant amounts, compute the interest payment over the life of a loan by simply subtracting the original loan amount from the total of your payments (monthly payment x number of payments). Do this for a realistic loan amount for a home.

State your loan amount, monthly payment, term of the loan, and the total amount you would pay in interest over the life of the loan. Now answer the following questions: How much more (for example: 2 times, 2.5 times, 3 times, etc.) are you paying in interest than the actual loan amount? Does this surprise you? What might be an effective way to greatly reduce this interest amount? (You do not need to do an actual calculation for this last question).

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