Question

Derek borrows $343,539.00 to buy a house. He has a 30-year mortgage with a rate of 5.68%. After making 107.00 payments, how much does he owe on the mortgage?

Answer 1

PVOrdinary Annuity = C*[(1-(1+i/(f*100))^(-n*f))/(i/(f*100))]

C = Cash flow per period

i = interest rate

n = number of payments I f = frequency of payment

343539= Cash Flow*((1-(1+ 5.68/1200)^(-30*12))/(5.68/1200))

Cash Flow = 1989.55

Using Calculator: press buttons "2ND"+"FV" then assign

PV =-343539

I/Y =5.68/12

N =30*12

FV = 0

CPT PMT

Using Excel

=PMT(rate,nper,pv,fv,type)

=PMT(5.68/(12*100),12*30,,343539,)

PVOrdinary Annuity = C*[(1-(1+i/(f*100))^(-n*f))/(i/(f*100))]

C = Cash flow per period

i = interest rate

n = number of payments I f = frequency of payment

PV= 1989.55*((1-(1+ 5.68/1200)^(-21.0833333333333*12))/(5.68/1200))

PV = 293055.53

Using Calculator: press buttons "2ND"+"FV" then assign

PMT =1989.55

I/Y =5.68/12

N =21.0833333333333*12

FV = 0

CPT PV

Using Excel

=PV(rate,nper,pmt,FV,type)

=PV(5.68/(12*100),12*21.0833333333333,,PV,)