What will the total amount paid back by a borrower with a 15-year loan of $250,000 at a 5.5% interest rate be?

To determine the total amount paid back by a borrower for a 15-year loan of $250,000 at a 5.5% interest rate, one must consider how the loan is amortized over the term.

For a loan of this nature, the borrower makes fixed monthly payments that include both principal and interest. The formula used in this scenario typically involves calculating the monthly payment first and then multiplying that by the total number of payments over the loan's term.

In this example, the loan amount is $250,000, the interest rate is 5.5%, and the duration is 15 years, which results in 180 monthly payments. Using the formula for calculating the monthly payment, one finds that the monthly payment is approximately $2,079. The total amount paid over 15 years is then computed by multiplying this monthly payment by the total number of months (180). This results in a total repayment figure of about $367,687.80.

This amount includes the original loan amount plus the interest accrued over the term, reflecting the cost of borrowing over a 15-year period at the specified interest rate. Therefore, the total amount paid back by the borrower, which comprehensively encapsulates both the principal and the interest