Question

Brandon bought a home exactly 15 years ago. He financed $210,000 at 4.8% over 30 years. His monthly payment is $1,101.80. Calculate Brandon's current mortgage balance.

Round to nearest dollar and do NOT use a dollar sign.

Answer 1

Calculation of Current Mortgage Balance :

Balloon Payment = Present value * (1 + rate)^n - Periodic payment {[(1 + r)^n - 1 ] / r}

where rate is the rate of interest per period i.e 4.8%/12=0.4% or 0.004

n is the number of payments i.e 15 * 12 = 180

Present Value = $210000

Peridic payment = 1101.80

Value of Loan = 210,000 * (1 + 0.004)^180 - 1101.80{[(1 + 0.004)^180 - 1 ] / 0.004}

= 210000 * 2.05148481 - 1101.80 {[2.05148481 - 1 ] / 0.004}

= 430811.8101 - 1101.80 * 262.8712025

= 430811.8101 - 289631.4909

= 141,180.3192 or $141,180.32

= 4691.831456 - 4511.55055

= 180.2809064 or 180.28