Question

Consider a 30-year 115,000 fixed rate mortage with a nominal rate of 5.45 percent all payments are made at the end of each month. what is the remaining balance on the mortgage after 5 years?

Answer 1

For calculation of principal outstanding after 5 years, we have to first calculate EMI per month
using the given parameters,
PV	115000
NPER	360	(30 Yrs x 12 months)
Rate	0.00454167	(5.45%/12)
PMT(EMI)	$649.35
	=PMT(5.45%/12,360,-115000)
Since EMI per month is $649.35 so balance outstanding after 5 years is present value of remaining EMIS for 300 months
PMT	$649.35
NPER	300	(25 x 12)
Rate	0.00454167	(5.45%/12)
PV	$106,258.32
	=PV(5.45%/12,300,-649.35)