Posted by Antoinette on .
You take out a 30-year $100,000 mortgage loan with an APR of 6 percent and monthly payments. In 12 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?
I am working this on the assumption that your monthly rate is .005.
First we find our monthly payment:
Now finding the amount of 144 of those payments
Finding the value of our debt after 144 periods if no payments had been made
So the outstanding balance after 12 years
I hope you are familiar with the formulas I was using.