Posted by TRAY on .
Five years ago, you bought a house for $151,000, with a down payment of $30,000, which meant you took out a loan for $121,000. Your interest rate was 5.75% fixed. You would like to pay more on your loan. You check your bank statement and find the following information:
Principle and Interest payment
Current Loan Balance
Explain how much additional money you would need to add to your monthly payment to pay off your loan in 20 years instead of 25.
P = (Po*r*t)/(1-(1+r)^-t).
Po = $112,242.47.
r = (5.75%/12) / 100% = 0.0048 = Monthly
% rate expressed as a decimal.
t = 12mo./yr * 20yrs = 240 Months.
Plug the above values in the given Eq
and solve for P.
Answer:P = $189,282.43
Monthly(I+P)=P/t=189282.43 / 240=$788.51
788.51 - 706.12 = $82.39 Higher.
This amount will be added to the previous monthly payment of $917.25.