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?
According to these sites, you'd owe $79,679.07 after 12 years.
http://mortgages.interest.com/content/calculators/balloon_mortgage_calculator.asp
http://www.bankrate.com/brm/mortgage-calculator.asp?unroundedPayment=599.550525152757&loanAmount=100000.00&nrOfYears=30&nrOfMonths=360&interestRate=6.00&startMonth=4&startDay=10&startYear=2008&monthlyPayment=599.55&monthlyAdditional=0&yearlyAdditional=0&yearlyAdditionalMonth=4&oneAdditional=0&oneAdditionalMonth=4&oneAdditionalYear=2008&paidOffDate=May+10%2C+2038&submit.x=40&submit.y=1
You take out a $200,000 mortgage for 30 years at 6%.
What is your monthly payment? Solve Below
Fill out the ammortization table to answer the following questions.
What is the principle and interest on the 1st payment?
What is the principle and interest on the 12th payment?
How much interest will you pay over the 30 years?
NOTE:Completing the table will automatically transfer the final 3 questions to the answer page.
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Sum this column to answer last question
To calculate the principal balance on the loan after 12 years, we need to understand how mortgage loans work.
A mortgage loan consists of monthly payments made over a specific period, known as the loan term. In this case, it is a 30-year loan term.
The monthly payment amount is calculated using the loan amount, interest rate, and loan term. We can use the formula for the monthly payment on a fixed-rate mortgage:
M = P [i(1 + i)^n] / [(1 + i)^n - 1]
Where:
- M is the monthly payment
- P is the loan amount (principal)
- i is the monthly interest rate (APR divided by 12)
- n is the total number of monthly payments (loan term in years multiplied by 12)
Let's calculate the monthly payment amount first:
P = $100,000 (loan amount)
APR = 6% (annual percentage rate)
i = 6% / 12 = 0.005 (monthly interest rate)
n = 30 years * 12 = 360 (total number of monthly payments)
Using the formula:
M = $100,000 [0.005(1 + 0.005)^360] / [(1 + 0.005)^360 - 1]
M ≈ $599.55
So, the monthly payment amount is approximately $599.55.
Now, to find the principal balance after 12 years, we need to calculate the remaining number of payments and subtract them from the original loan amount.
Remaining number of payments = (loan term - number of years already passed) * 12
= (30 - 12) * 12
= 18 * 12
= 216
Principal balance = P - M * remaining number of payments
= $100,000 - $599.55 * 216
Calculating the principal balance:
Principal balance ≈ $100,000 - $129,524.40
≈ -$29,524.40
The principal balance on the loan after 12 years is approximately -$29,524.40. This means that you owe $29,524.40 on the mortgage loan after 12 years.