Question

17 years ago you borrowed $174134 to buy a house. The interest rate quoted to you was 7.6 percent for 30 years with monthly payments. Assuming you have made regular monthly payments up to now, what is the amount (in $) you still owe on the loan today?

Answer 1

Calculation of monthly payments:

Amount borrowed = $174,134
Annual interest rate = 7.60%
Monthly interest rate = 0.633%
Period = 30 years or 360 months

Let monthly payment be $x

$174,134 = $x/1.00633 + $x/1.00633^2 + ... + $x/1.00633^360
$174,134 = $x * (1 - (1/1.00633)^360) / 0.00633
$174,134 = $x * 141.683228
$x = $1,229.04

Monthly payment = $1,229.04

Calculation of loan outstanding:

Period = 13 years or 156 months

Loan outstanding = $1,229.04/1.00633 + $1,229.04/1.00633^2 + ... + $1,229.04/1.00633^156
Loan outstanding = $1,229.04 * (1 - (1/1.00633)^156) / 0.00633
Loan outstanding = $1,229.04 * 98.945433
Loan outstanding = $121,607.89