John has a level-payment mortgage loan with 12 years remaining, at an interest rate of 7%...

John has a level-payment mortgage loan with 12 years remaining, at an interest rate of 7% with a payment of $1,000/monthly. John's mortgage balance is:

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Expert Solution

We are required to calculate the present value of annuity.

Given information

Annuity payment	1,000.00
Interest rate	7%
Compounding frequency --> monthly	12
Rate per compounding period -->(Interest rate / compounding frequency)	0.58%
No. of years	12
No. of compounding periods --> (no. of years x compounding frequency)	144

PV annuity factor ---> Formula -->

(1-(1+monthly interest rate)^-no. of compounding frequency) / monthly interest rate

97.24

PV of annuity (Monthly annuity payment x PV annuity factor)

97,240.22

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Thanks

jeff jeffy answered 1 year ago

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