Question

you bought a house for $500000 with 20% down payment, that you borrowed 400000 from the bank with apr 4.8% for 30 year mortgage loan. after 10 years, you sold the house for $600000. how much do you receive after paying off the loan?

Answer 1

Calculation of monthly payment:

Amount borrowed = $400,000
Annual interest rate = 4.80%
Monthly interest rate = 0.40%
Period of loan = 30 years or 360 months

Monthly payment * PVIFA(0.40%, 360) = $400,000
Monthly payment * (1 - (1/1.004)^360) / 0.004 = $400,000
Monthly payment * 190.59768 = $400,000
Monthly payment = $2,098.66

Calculation of loan outstanding after 10 years:

Period of loan = 20 years or 240 months

Loan outstanding = $2,098.66 * PVIFA(0.40%, 240)
Loan outstanding = $2,098.66 * (1 - (1/1.004)^240) / 0.004
Loan outstanding = $2,098.66 * 154.09330
Loan outstanding = $323,389.44

Proceed from sale of house = $600,000

Net pay off = Proceed from sale - Loan outstanding
Net pay off = $600,000 - $323,389.44
Net pay off = $276,610.56