Homework Help: Math

Posted by Sara on Tuesday, May 15, 2012 at 4:25pm.

Sarah secured a bank loan of $200,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 yr, with interest rate of 6%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 yr. How much will Sarah still owe on her house?

Math - Reiny, Tuesday, May 15, 2012 at 6:32pm
payment = ?
n = 180
i = .06/12 = .005
200000 = paym( 1 - 1.005^-180)/.005
paym = 1687.71

balance after 5 years
= 200000(1.005)^60 - 1687.71(1.005^60 - 1)/.005
=269770.03 - 117751.83
= 152018.20

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