Question

Suppose you take out a 20-year, $300,000 mortgage at 7% and decide after 15 years to pay off the mortgage. How much will you have to pay?

Answer 1

  

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Outstanding balance after 5 years =

r = 0.07 / 12 = 0.00583333333

n = 20 * 12 = 140

m = 15 * 12 = 180

=

= 300,000 * (4.03873884577 - 2.84894672917) / 3.03873884577

= 117462.43

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