Question

14) a) Find the monthly payments on a $200,000 thirty year mortgage if the interest rate is 4.5% compounded monthly b) Find the unpaid balance after 8 years

Can you please hand write the answers amd work. please I need the answers for a and b.

Answer 1

Answer a.

Loan amount = $200,000
Time period = 30 years or 360 months

Annual interest rate = 4.50% compounded monthly
Monthly interest rate = 4.50% / 12
Monthly interest rate = 0.3750%

Let monthly payment be $x

$200,000 = $x/1.00375 + $x/1.00375^2 + … + $x/1.00375^359 + $x/1.00375^360
$200,000 = $x * (1 - (1/1.00375)^360) / 0.00375
$200,000 = $x * 197.361159
$x = $1,013.37

Monthly payment = $1,013.37

Answer b.

Remaining time period = 22 years or 264 months

Loan outstanding = $1,013.37/1.00375 + $1,013.37/1.00375^2 + … + $1,013.37/1.00375^263 + $1,013.37/1.00375^264
Loan outstanding = $1,013.37 * (1 - (1/1.00375)^264) / 0.00375
Loan outstanding = $1,013.37 * 167.395907
Loan outstanding = $169,633.99