Calculate the total amount paid over the life of a loan if the monthly payment is $583.56 and there are 360 payments.

Calculate the total amount paid over the life of a loan if the monthly payment is $583.56 and there are 360 payments.

• A. $210,081.60
• B. $127,000.00
• C. $583.56
• D. $360.00

Answer: (A)

The amount paid over the life of a loan is found by multiplying the regular payment by the total number of payments. Here, 583.56 dollars are paid each month for 360 months, so you multiply 583.56 by 360 to get 210,081.60. This total represents all payments made—principal plus interest—over the life of the loan, not the amount borrowed. The other figures don’t reflect the total paid: one is just a single monthly payment, another would be the number of payments expressed as a dollar amount, and the last is far too small to equal the sum of 360 payments.

The amount paid over the life of a loan is found by multiplying the regular payment by the total number of payments. Here, 583.56 dollars are paid each month for 360 months, so you multiply 583.56 by 360 to get 210,081.60. This total represents all payments made—principal plus interest—over the life of the loan, not the amount borrowed.

The other figures don’t reflect the total paid: one is just a single monthly payment, another would be the number of payments expressed as a dollar amount, and the last is far too small to equal the sum of 360 payments.