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 $750,000.The mortgage is currently exactly? 18½ years? old, and you have just made a payment. If the interest rate on the mortgage is 6.25%? (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.)

(can you show solution on a financial calculator if possible)

Answer 1

1)	The monthly payments to be made on the loan of $750000 = 750000*((0.0625/12)*(1+0.0625/12)^360)/((1+0.0625/12)^360-1)) =	$          4,617.88
2)	The balance outstanding on the mortage is the PV of the
	remaining installments on the loan; ie: 11.5*12 = 138 months
	(installments).
	Hence, balance outstanding = 4617.88*((1+0.0625/12)^138-1))/((0.0625/12)*(1+0.0625/12)^138) =	$    4,53,715.81
3)	Cash available after paying the mortgage = 900000-453715.81 =	$    4,46,284.19