Homework Help: finance

Posted by Anonymous on Tuesday, November 20, 2012 at 1:14pm.

You take out a 25-year $210,000 mortgage loan with an APR of 12% and monthly payments. In 16 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

finance - Reiny, Tuesday, November 20, 2012 at 3:36pm
First we need the monthly payment, let it be P
P(1 - 1.01^-300)/.01 = 210000
P = $2211.18

amount owing after 16 years
= 210000(1.01)^192 - 2211.18(1.01^192 - 1)/.01
= $146,002.35

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