If M obtains a $80,000 loan at 9.5% interest for thirty years, what is the total interest paid over the full term of the loan?

To determine the total interest paid over the term of the loan, it's essential to calculate the monthly payment and then assess the total payments over the entire duration of the loan. For a loan amount of $80,000 at an interest rate of 9.5% for 30 years, the standard mortgage formula or a financial calculator can be used to find the monthly payment.

Once you calculate the monthly payment using the provided interest rate and loan amount, you multiply this monthly payment by the total number of payments, which is 360 for a 30-year loan (30 years x 12 months/year). This will give you the total amount paid over the lifetime of the loan.

Next, to find the total interest paid, subtract the original loan amount ($80,000) from the total of all payments made. This will give you the total interest paid over the 30-year period.

The calculations show that the total interest paid amounts to $162,164.80, which is the correct answer. Understanding how to compute the total interest highlights the impact of interest rates and loan terms on overall financing costs, which is essential knowledge for anyone considering loans.