Question

Derek borrows $333,334.00 to buy a house. He has a 30-year mortgage with a rate of 5.73%. After making 118.00 payments, how much does he owe on the mortgage?

Answer 1

The Formula for calculating the monthly installement amount is :

Loan amount/PVIFA(5.73%/12,30*12)

=333,334/PVIFA(0.4775%,360)

= $1910(approx)

Total mortage amount with interest = 1910*360

= $687,600

Number of installments paid = 118

Total amount repaid = 118*1910

= $225,380

Remaining mortage amount = 687,600 - 225,380

= $ 462,220

note: since the mortage amount includes both principle and interest portion and the question does not ask specifically for only the principle potion, hence this is solves on the assumption that question is asking remaining principle plus interest portion.