Question

# Exactly 18 years ago, you took out a \$550,000 30-year mortgage with monthly payments and an...

Exactly 18 years ago, you took out a \$550,000 30-year mortgage with monthly payments and

an APR of 10% compounded monthly. You have just made your 216th payment. What is the

Calculation of monthly payment:

Amount borrowed = \$550,000
Time period = 30 years or 360 months

Annual interest rate = 10.00%
Monthly interest rate = 10.00% / 12
Monthly interest rate = 0.8333%

Let monthly payment be \$x

\$550,000 = \$x/1.008333 + \$x/1.008333^2 + … + \$x/1.008333^359 + \$x/1.008333^360
\$550,000 = \$x * (1 - (1/1.008333)^360) / 0.008333
\$550,000 = \$x * 113.954658
\$x = \$4,826.48

Monthly payment = \$4,826.48

Calculation of loan outstanding:

Time period = 12 years or 144 months

Loan outstanding = \$4,826.48/1.008333 + \$4,826.48/1.008333^2 + … + \$4,826.48/1.008333^143 + \$4,826.48/1.008333^144
Loan outstanding = \$4,826.48 * (1 - (1/1.008333)^144) / 0.008333
Loan outstanding = \$4,826.48 * 83.678146
Loan outstanding = \$403,870.90

#### Earn Coins

Coins can be redeemed for fabulous gifts.