Question

Thirty year mortgage for $230,000 at 3.78%; remaining balance after 12 years The monthly payment is $….The remaining balance is $….

Answer 1

Answer:

The monthly payment is $1989.24

The remaining balance is $429,675.84

Explanation:

Given that loan amount = $230,000

Rate R = 3.78% = 0.0378

Monthly rate = 0.0378/12 = 0.00315

Time n = 12 years

We have:

$M=\frac{PR(1+R)^n}{(1+R)^n-1}$

Using the above formula, we have:

$\begin{gathered} M=\frac{230000\times0.00315(1+0.00315)^{144}}{(1+0.00315)^{144}-1} \\ \\ =1989.24 \end{gathered}$

The remaining balance after 12 years is:

$\begin{gathered} (1989.24\times12\times30)-(1989.24\times12\times12) \\ =429675.84 \end{gathered}$