Math

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Sarah secured a bank loan of $200,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 yr, with interest rate of 6%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 yr. How much will Sarah still owe on her house?

  • Math -

    payment = ?
    n = 180
    i = .06/12 = .005
    200000 = paym( 1 - 1.005^-180)/.005
    paym = 1687.71

    balance after 5 years
    = 200000(1.005)^60 - 1687.71(1.005^60 - 1)/.005
    =269770.03 - 117751.83
    = 152018.20

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