Question

Derek borrows $264,831.00 to buy a house. He has a 30-year mortgage with a rate of 5.26%. After making 149.00 payments, how much does he owe on the mortgage?

Answer 1

Information provided:

Present value= $264,831

Time= 30 years*12 = 360 months

Interest rate= 5.26%/12= 0.4383% per month

The question is calculating the monthly payment.

The monthly payment is calculated by entering the below in a financial calculator:

PV= -264,831

N= 360

I/Y= 0.4383

The value obtained is 1,464.05.

Therefore, the monthly payment is $1,464.06.

Amount owed after making 149 payments:

= $264,831 - ($1,464.04*149)\

= $264,831 - $218,143.45

= $46,687.55.