You have aloan for 150,000 at 5% on a 30 yr mortgage. You plan to pay off your loan in 10 yrs. Do you want your loan to be figured using the Rule of 78 or the Unpaid Principle Balance Rule or something else.

Question

You have aloan for 150,000 at 5% on a 30 yr mortgage. You plan to pay off your loan in 10 yrs. Do you want your loan to be figured using the Rule of 78 or the Unpaid Principle Balance Rule or something else.

Answer 1

Using the "something else" way, (the way it is actually done)

150000 = payment (1 - 1.00416666..^-360)/(.004166666...)
150000 = payment(186.281634
payment = 805.23

I will let you figure out the other two ways, since I have no clue anymore what they are. ( I think I knew about 55 years ago)