Question

Consider a 30-year mortgage for $347,060 at an annual interest rate of 4.7%. What is the remaining balance after 5 years?

Answer 1

Remaining balance after 5 years is $ 3,17,320.30

Step-1:Calculation of monthly payment
Monthly Payment	=	Mortgage amount	/	Present value of annuity of 1
	=	$ 3,47,060.00	/	192.8128
	=	$       1,799.98
Working:
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	192.8127841		i	=	4.7%/12	=	0.003917
				n	=	30*12	=	360
Step-2:Calculation of remaining balance after 5 years
Remaining balance after 5 years	=	Monthly payment	*	Present value of annuity of 1
	=	$       1,799.98	*	176.2906
	=	$ 3,17,320.30
Working:
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	176.2905833		i	=	4.7%/12	=	0.003917
				n	=	25*12	=	300