Posted by Tonia on .
You have just graduated from college and landed your first big job. You have always dreamed of being a homeowner, and after carefully shopping for your dream home, you find one that you would like to purchase at a cost of $250,000. After researching banks to find the best interest rate, you find that Banks for Homeowners offers the best rate of 6% interest that compounds monthly for 30 years.
•What is the monthly payment for this loan?
•What is the unpaid balance of the loan at the end of 5 years?
•What is the unpaid balance at the end of the 10th year?
There is a formula for this but I can't remember it. It is easier to use an amortization table such as the one at
Using it, I got a monthly payment of $1498.88
After 5 years, the unpaid balance is $232,300.20
After 10 years, the unpaid balance is $209,214.31
The formula to use can be found at http://www.amortizationformula.org/