Question

Jeremy takes out a 30-year mortgage of 210000 dollars at an annual interest rate of 7.5 percent compounded monthly, with the first payment due in one month. How much does he owe on the loan immediately after the 87th payment?

Answer 1

Answer:

Loan amount = PV = $210,000

NPER in months = 30 * 12 = 360

Monthly Interest rate = 7.50%/12

Monthly payment = PMT(rate, nper, pv, fv, type)

= PMT(7.50%/12, 360, -210000, 0, 0)

= $1468.35047

After 87th payment:

Remaining number of monthly payments = 360 - 87 = 273

Oustanding loan balance immediately after the 87th payment = PV of remaining monthly payments

= PV(rate, nper, pmt, fv, type)

= PV(7.50%/12, 273,-1468.35047,0,0)

= $192057.45

Amount he owes on the loan immediately after the 87th payment = $192,057.45