Finance

You take out a 30-year $100,000 mortgage loan with an APR of 6 percent and monthly payments. In 12 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

I am working this on the assumption that your monthly rate is .005.

First we find our monthly payment:

100000= paym[1-(1.005)^-360]/.005

paym= 599.55

Now finding the amount of 144 of those payments
=599.55((1.005^144)-1)/.005
=125,995.64

Finding the value of our debt after 144 periods if no payments had been made
=100000(1.005^144
=205,075.08

So the outstanding balance after 12 years
= 205075.08-125995.64
=79,079.44

I hope you are familiar with the formulas I was using.

  1. 👍 0
  2. 👎 1
  3. 👁 1,736

Respond to this Question

First Name

Your Response

Similar Questions

  1. FINANCE

    You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 35-year mortgage loan for 75 percent of the $3,250,000 purchase price. The monthly payment on this loan will be $15,800. Requirement 1: What

  2. Finance

    You have arranged for a loan on your new car that will require the first payment today. The loan is for $32,000, and the monthly payments are $620. Required: If the loan will be paid off over the next 60 months, what is the APR of

  3. Financial

    You need a 30-year, fixed-rate mortgage to buy a new home for $235,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 360-month loan. However, you can afford monthly payments of only $925, so you

  4. Finance

    Audrey Sanborn has just arranged to purchase a $550,000 vacation home in the Bahamas with a 20 percent down payment. The mortgage has a 6.1 percent stated annual interest rate, compounded monthly, and calls for equal monthly

  1. finance

    You borrow $149,000 to buy a house. The mortgage rate is 7.5 percent and the loan period is 30 years. Payments are made monthly. If you pay for the house according to the loan agreement, how much total interest will you pay?

  2. Math

    Pey Soon has taken out a 20-year, $150,000 mortgage with monthly payments (made at the end of each month) at a stated mortgage rate of 6.8% per year compounded semi-annually. If she makes each payment on time, what will be the

  3. Finance: Mortgages

    A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6 (initial adjustment cap/periodic interest rate cap/lifetime interest rate cap). The start rate is 3.50% and the loan adjusts every 12 months for the

  4. math

    Case: A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6. The start rate is 3.50% and the loan adjusts every 12 months for the life of the mortgage. The index used for this mortgage is LIBOR (for

  1. Finance

    Loan Payments - If you take out an $8,000 car loan that calls for 48 monthly payments APR of 10 percent, what is your monthly payment? What is the effecgive annual interest rate on the loan? the montly rate is 0.10/12=.0083333...

  2. Finance

    You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 38-year mortgage loan for 70 percent of the $3,380,000 purchase price. The monthly payment on this loan will be $17,100. What is the APR on

  3. business math

    Shantel and Kwamie are planning to buy their first home. Although they are excited about the prospect of being homeowners, they are also a little frightened. A mortgage payment for the next 30 years sounds like a huge commitment.

  4. math

    The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $100,000 and was to amortized in 240 equal monthly installments at an interest rate of 11%/year compounded monthly. The new

You can view more similar questions or ask a new question.