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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?

  • finance -

    10%??? Holy smoke! I'd be shopping around for a different lender!

  • finance -

    That is the problem with old textbooks.
    Secondly, who pays annual mortgage payments?

    anyway ...

    200000= payment(1 - 1.1^-10)/.1

    solve for "payment"

    For principal after one year
    = 200000(1.1) - (payment)

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