Question

need answer pls thank u so much

I thepeo ) (20 P .) When you purchased your home. yon towk out 10-year annual payment mengage with an interest rate of per year The annual payment in the mirigace to 312. 00. You have just make payment and have now decided to pay the mortgage or by repaying the outstanding balance. What is the payoff anunt ir . You have lived in the house for 12 years (so there are 18 years le on the mortgage)? b. You have lived in the house for 20 years (so there are 10 years len on the mortgage)? c. You have lived in the house for 12 years (so there are 18 years left on the mortgage) and you decide to pay off the mortgage immediately before the rwelfth payment is due?

Answer 1

N = 30; rate = 6%; PMT (annual payment) = 12,000, solve for PV.

Principal amount (or mortgage) = 165,177.97

a). Total outstanding amount to be paid off after 12 years = annual payment*number of payments left = 12,000*(30-12) = 216,000

Outstanding principal balance after 12 years: PMT = 12,000; i = 6%; N = 18, solve for PV.

Outstanding principal to be paid off = 129,931.24

b). Total outstanding amount to be paid off after 20 years = annual payment*number of payments left = 12,000*(30-20) = 120,000

Outstanding principal balance after 20 years: PMT = 12,000; i = 6%; N = 10, solve for PV.

Outstanding principal to be paid off = 88,321.04

c). If the mortgage is paid off just before the 12th installment is due, that means 11 installments have been paid off.

That leaves a total of 30 -11 = 19 installments to be paid off.

So, total outstanding amount to be paid off = 12,000*19 = 228,000

Outstanding principal balance: PMT = 12,000; i = 6%; N = 19, solve for PV.

Outstanding principal to be paid off = 133,897.40