Question

What will be the mortgage balance remaining on a loan of $ 211722 with a 34-year term (monthly compounding) and k = 0.053 after 21 end-of-month payments have been made?

Round your final answer to 2 decimal places.

Answer 1

Mortgage Amount = $211,722

Time Period of Loan = 34 years = 408 months

Interest Rate = 5.30%

Calculating Monthly Payment on Mortgage,

Using TVM Calculation,

PMT = [PV = 211,722, FV = 0, T = 408, I = 0.053/12]

PMT = $1,120.72

Monthly Payment = $1,120.72

Now Calculating Value of Loan after 21 payments,

Using TVM Calculation,

FV = [PV = 211,722, T = 21, PMT = -1,120.72, I = 0.053/12]

FV = $207,647.03

So,

Mortgage Balance after 21 end of month payments = $207,647.03