Question

Find the unpaid balance on the debt. (Round your answer to the nearest cent.)

After 6 years of monthly payments on $150,000 at 5% for 25 years.

Answer 1

Given:

Principal = $150, 000

Interest = 5% =0.05 monthly

Time period = 25* 12 months = 300 months

Interest for 25 years = Principal * Interest * time period

= $150,000 * 0.05 * 300

= 2,250,000

Amount = Principal + Interest

= $150,000 + $2,250,000

= $2,400,000

Paid balance for 6 years = Principal * Interest * time period

= $150,000 * 0.05 * (6*12)

= $540, 000

Unpaid balance on the debt = Amount (with interest) - Unpaid balance

= $2,400,000 - $540,000

= $1,860,000