infinite math

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Hey guys! really need help with this one!!!

On December 31, 1995, a house is purchased with the buyer taking out a 30-year $90,000 mortgage at 9% interest compounded monthly. The mortgage payments are made at the end of each month. Calculate:

(A) the unpaid balance of the loan on December 31,2005, just after the 120th payment.

(B) the interest that will be paid during January 2006.

Thanks in advance!

  • infinite math -

    first you need the monthly payment

    PV = 90000
    i = .09/12 = .0075
    n = 12x30 = 360

    90000 = Payment [ 1 - 1.0075^-360]/.0075
    payment = 724.16

    balance right after 120th payment
    = 90000(1.0075)^120 - 724.16( 1.0075^120 - 1)/.0075
    = 80486.77

    interest on next month = 80486.77(.0075) = 603.65

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