Question

A $425,000 mortgage with a 3-year term is amortized over 25 years at an interest rate of 8.2% compounded semi-annually. If payments are made at the end of each month, determine the mortgage balance at the end of the 3-year term.

Answer 1

First of all we need to understand mortgage term and Amortization term.

Mortgage term is the period during which person need to pay to the agreeing term .

but amortisation term is the period at the end of which balance dur amount will be zero.

	EMI =	(principal* intt rate*(1+r)^n)/(1+r)^n-1
	Principal	425000
	N	50 semi annually
	r	4.1% semi annually
power of 1.041	value
2	1.083681		EMI	(425000*0.041*7.46)/(7.46-1)
3	1.128112			20122.37
4	1.174365
5	1.222513		Half Year	EMI	Interest	Principal	O/S balance
6	1.272637		0				425000
7	1.324815		1	20122.37	17425	2697.37	422302.63
8	1.379132		2	20122.37	17314.41	2807.96	419494.67
9	1.435676		3	20122.37	17199.28	2923.09	416571.58
10	1.494539		4	20122.37	17079.43	3042.94	413528.64
11	1.555815		5	20122.37	16954.67	3167.70	410360.95
12	1.619604		6	20122.37	16824.8	3297.57	407063.38
13	1.686007
14	1.755134		Balance after 3 year would be = 407063.38$
15	1.827094
16	1.902005
17	1.979987
18	2.061167
19	2.145675
20	2.233647
21	2.325227
22	2.420561
23	2.519804
24	2.623116
25	2.730664
26	2.842621
27	2.959169
28	3.080494
29	3.206795
30	3.338273
31	3.475142
32	3.617623
33	3.765946
34	3.92035
35	4.081084
36	4.248408
37	4.422593
38	4.60392
39	4.79268
40	4.98918
41	5.193736
42	5.40668
43	5.628354
44	5.859116
45	6.09934
46	6.349413
47	6.609739
48	6.880738
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