Question

Derek borrows $250,744.00 to buy a house. He has a 30-year mortgage with a rate of 5.91%. After making 118.00 payments, how much does he owe on the mortgage?

Answer 1

Answer-

Amount borrowed = $ 250744
Interest rate = 5.91 %
Number of Payments = 30 years = 30 x 12 = 360

PV = $ 250744
N = 360
I/Y = 5.91 % / year
I/Y = 5.91 % / 12 = 0.4925 % / month
FV =$ 0
PMT or EMI = ?

Substitutig all the above values in the calculator we get

PMT or EMI = $ 1488.86

Total amount paid in 360 months = $ 1488.86 x 360 = $ 535989.6
Total amout paid in 118 months = $ 1488.86 x 118 = $ 175685.48

After making 118 payments the amount of money he owes on the mortgage
= $ 535989.6 - $ 175685.48
= $ 360304.12

Therefore the amount one owes to mortgage after making 118 payments = $ 360304.12