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You buy a new home for $500,000 on the first day of the month. You put...

You buy a new home for $500,000 on the first day of the month. You put down $50,000 and finance the rest with a mortgage at 6% annual interest compounded monthly on the last day of the month. Your monthly payments including principal and interest are 2500. Your payments are due on the first day of the month, starting next month. What is your loan balance after your third monthly payment ?

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Answer #1
Annual interest = 6%
Monthly rate of interest = 6/12 = 0.50%
Period Payment Interest Principal balance
Repaid Outtstanding
0 450000
1 2500 2250 250 449750
2 2500 2249 251 449499
3 2500 2248 252 449247
Loan outstanding after 3rd payment = 449247
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