Question

You purchased a new house for $200,000 and financed the entire purchase with a $200,000 mortgage, payable monthly over 30 years at a yearly rate of 4.5%. How much do you owe on this house today after making 4 years of monthly payments?

a. $188,277.00

b. $ 44,439.65

c. $173,333.33

d. $186,177.19

e. $ 48,827.09

Answer 1

Loan amount =	200000
Interest rate =	4.50%
Monthly rate =4.5%/12=	0.00375
Number of years =	30
Number of monts in 30 years (n) =	360
Monthly payment formula = P*i/(1-((1+i)^-n))
200000*0.00375/(1-((1+0.00375)^-360))
1013.37062
So Monthly payment is	$1,013.37
No of months remaining after 4 years of repayment(n)= (30-4)*12 =	312
Unpaid balance formula (P)=monthly payment *(1-((1+i)^-n))/i
1013.37*(1-((1+0.00375)^-312))/0.00375
186177.1863
So remaining balance of loan amount is	$186,177.19
Answer is d

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