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kupik [55]
3 years ago
8

John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6 percent per year. What is the remaining

balance (or value) of the mortgage after the payment of the fifth annual installment?
Business
1 answer:
dangina [55]3 years ago
6 0

Answer:

$211,689. 53

Explanation:

Calculation to determine the remaining balance (or value) of the mortgage after the payment of the fifth annual installment

Step 1 is to compute PMT using Financial calculator

I = 6%

N = 20

PV = 250,000

FV = 0

PMT=?

Hence,

PMT = 21,796.14.

Now let determine the PV using Financial calculator

I = 6%

N = 15

PMT = 21,796.14

PV=?

Hence,

PV = $211,689. 53

Therefore the remaining balance (or value) of the mortgage after the payment of the fifth annual installment is $211,689. 53

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