Suppose a homeowner started out with a mortgage in the amount of $225,000, repayable over a...

Suppose a homeowner started out with a mortgage in the amount of $225,000, repayable over a 30 year period, making payments at an interest rate of 4.5% APR, compounded monthly. After making 60 payments, the homeowner received a substantial bonus from her employer, allowing her to make a $50,000 principal reduction on the mortgage loan. If she continues to make the same payment, by approximately how many years will this one time payment reduce the amount of time it takes to pay off this loan?

A. approximately 7 years shorter

B. approximately 8 years shorter

C. approximately 9 years shorter

D. approximately 10 years shorter

Expert Solution

jeff jeffy answered 1 year ago

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