Question

You have just sold your house for $900,000 in cash. Your mortgage was originally a​ 30-year mortgage with monthly payments and an initial balance of $ 800,000. The mortgage is currently exactly​ 18½ years​ old, and you have just made a payment. If the interest rate on the mortgag is 7.75% ​(APR), how much cash will you have from the sale once you pay off the​ mortgage? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Answer 1

Annual rate = 7.75%
Monthly rate =7.75/12 = 0.6458%
Amount borrowed					800000
Divide: Annuity payment of 360 periods at 0.6458%					139.5898
Monthly payment to be made					5731.08
Remaining instalmentn after 18.50 years = 360-222 =138
Annuity PVF at 0.6458% for 138 periods					91.15228
Multiply: Monthly payment					5731.08
Principal outstanding at the time of sale					522401
Cash sales value of houese					900000
Less: Principal outstanding paid					522401
Amount in hand					377599