This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $108,123 left to pay on your loan. Your house is now valued at $180,000.
Your current situation
How much of the original loan $126,000.00 have you paid off? (i.e, how much have you reduced the loan balance by? Keep in mind that interest is charged each month - it's not part of the loan balance.)
is it? 126000-108123.00 =17877.00
or 1-(1+0.07/12)^-10*12= 0.50240373249137/
0.07/12= 0.0058333333333= 86.12*10*12=10335.16
please help!
I am glad to see that the present value of the house of $180,000 has nothing to do with the rest of the question.
You also did not state what the rate of interest is, but from you partial solution I will surmise it is 7%
The questions you asked can be answered as you did,
126000-108123.00 =17877.00
The obvious question, which you did not ask, would be:
What was the monthly payment?
monthly rate = .07/12 = .005833...
monthly payment ---- p
n = 120
so ....
126000(1.00583333..)^120 - p(1.005833...^120 - 1)/.0058333... = 108,123
I get p = $838.28
ASSIGNMENT 3
month it’s not part of the loan balance.) [4 MARKS]
the nearest cent.[3 MARKS]
is now valued at $180,000. How much of the original loan have you paid off? (i.e, how
[4 MARKS]
This assignment has 7 parts each part builds on the previous part.
a)Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down
payment, and financing the rest at 8% interest for 30 years. How much money did you pay
d)How much total interest will you pay over the life of the existing loan?[4 MARKS]
as your down payment? [3 MARKS]
Note: Carry at least 4 decimal places during calculations, but round your final answer to
e)This year (10 years after you first took out the loan), you check your loan balance. Only
much have you reduced the loan balance by? Keep in mind that interest is charged each
g)How much interest have you paid so far (overthe last 10 years)? [4 MARKS]
f)How much money have you paid to the loan company so far (over the last 10 years)?
towards interest. You see that you still have $118,428 left to pay on your loan. Your house
b)How much money was your existing mortgage (loan) for? [3 MARKS]
c)What is your current monthly payment on your existing mortgage?
part of your payments have been going to pay down the loan; the rest have been going
Well, it seems like you're in a bit of a pickle with your loan. Let's break it down:
To find out how much of the original loan you have paid off, you can simply subtract the remaining balance from the original loan amount. So, it would be:
$126,000.00 - $108,123.00 = $17,877.00
So, you have paid off $17,877.00 of the original loan amount.
Now, the second calculation you provided seems to be trying to calculate the monthly interest payments on the loan using an interest rate of 7%. While it's a valiant effort, it doesn't directly answer the question regarding the amount paid off.
But hey, you still have something to celebrate! You've already reduced your loan balance by $17,877.00, which is quite an achievement. Keep going, and you'll be debt-free in no time! Just remember to avoid any more clownish financial situations in the future.
To determine how much of the original loan you have paid off, you need to calculate the amount by which you have reduced the loan balance. In this case, you have mentioned that there is $108,123 left to pay on your loan.
So, the amount by which you have reduced the loan balance would be the difference between the original loan amount ($126,000.00) and the remaining balance ($108,123.00).
Therefore, the calculation would be:
$126,000.00 - $108,123.00 = $17,877.00
Hence, you have reduced the loan balance by $17,877.00.
The second calculation that you mentioned looks like an attempt to calculate the loan balance using an amortization formula. However, in this scenario, since you are given the remaining loan balance, you do not need to use that formula.