You just made the last monthly payment on a 30 year mortgage -- the house is yours! In your joyous moment, you calculate how muc

Question

3 years ago

15

You just made the last monthly payment on a 30 year mortgage -- the house is yours! In your joyous moment, you calculate how muc

h you made in payments over those 30 years, and it is $647,514! If your interest rate was an APR of 6%, and you made equal monthly payments, how much did you originally borrow for this house

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1 answer:

makkiz [27] · Answer 1 · 2021-12-10T16:06:32+03:00

Answer:

$112,807

Explanation:

To calculate the amount of money you borrowed, you have to use the formula to calculate the present value:

PV=FV/(1+r)^n

PV= pressent value

FV= future value= 647,514

r= rate= 6%

n= number of periods of time= 30

PV=647,514/(1+0.06)^30

PV=647,514/(1.06)^30

PV=647,514/5.74

PV=112,807

According to this, you originally borrowed $112,807 for this house.