Question

I recently bought a new house for $200,000. There was a 20% down payment, and the rest was financed at 4.8 percent APR with monthly compounding. Monthly payments starting from next month will be $1,248.66. How many years will it take the firm to pay off this debt?

Answer 1

New House price = $200,000

Loan amount = House price *(1- % of Down paymnet) = $200,000*(1-0.20)

= $160,000

Monthly Interest rate = 4.8%/12 = 0.4%

Monthly Loan Payment = $1248.66

Calculating the Number of months it will take to pay off the DebT using EXCEL "NPER" function:-

Number of months = 180

Number of Years = 180 months/12 months

Number of Years = 15 years

So, years will it take the firm to pay off this debt is 15

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