posted by Anonymous .
You have purchased a house and have obtained a 30-year, $ 200,000 mortgage with an interest rate of 10%. What is your annual payment? Assuming you bought the house on January 1, what is the principal after one year? ten years?
10%??? Holy smoke! I'd be shopping around for a different lender!
That is the problem with old textbooks.
Secondly, who pays annual mortgage payments?
200000= payment(1 - 1.1^-10)/.1
solve for "payment"
For principal after one year
= 200000(1.1) - (payment)