Thursday

April 17, 2014

April 17, 2014

Posted by **John** on Monday, September 24, 2007 at 10:35am.

a) How much of the mortgage will still be owed after the payment due in August 31, 2004, has been made?

b) Solve the same problem by separating the interest and the principal amounts.

Can you please show them step by step format so I can learn. thank you.

- Engineering Economy -
**economyst**, Tuesday, September 25, 2007 at 9:40amSo the loan (B0) was 150*.8 = 120K

The balance after 1 year and 1 payment would be B1=B0*(1.08)-P.

B2=(B1*(1.08)-P = B0*(1.08)^2 - P*(1.08) - P

....

B15 = B0(1.08)^15 - sum(P*(1.08)^i)

Solve for the annual payment P such that B15=0.

An Excel spreadsheet can handle this otherwise tedious calculation rather quickly.

**Related Questions**

Economics - Calculate the total dollar amount paid for a house purchased for $...

infinite math - Hey guys! really need help with this one!!! On December 31, 1995...

algebra - The price of a small cabin is $85000 the bank requires a 5% down ...

Math - The price of a small cabin is $40,000. The bank requires a 5% down ...

Financing - A. How much might a home buyer expect to pay in closing costs on a $...

math - Determine the regular payment amount, rounded to the nearest dollar. The ...

math - Determine the regular payment amount, rounded to the nearest dollar. The ...

math - Determine the regular payment amount, rounded to the nearest dollar. The ...

math - By selling a home without using a realtor, Barb can avoid paying a 7.25% ...

math - Refer to the following list of closing costs for purchase of a $ 175,000...