Sara has swimming lessons every fifth day and driving lessons every third day. If she had a swimming lesson and drving lesson on
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Answer:
Karen take 330 months to pay off her mortgage.
Step-by-step explanation:
Given : Karen has a $140,000 home financed with a 30-year loan at 5%. If she wished to pay one extra monthly payment each year.
To find : How many months will it take her to pay off her mortgage?
Solution : First we find the monthly payment
Formula of monthly payment
Monthly payment,
Discount factor
Where, Amount = $140,000
Rate r= 5%=0.05 compounded quarterly
Time = 30 years
Now, put all the values we get,
Monthly payment,
Approximately,monthly payment is $751
Extra payment for each year is = 751 × 30 = $22530
She wished to pay one extra monthly payment each year
i.e, Yearly payment is 751 × 12 = $9012
Years she paid extra payment is
Total years is 30 years , Extra year is 2.5 years
Time she take off to pay her mortgage is 30-2.5 = 27.5 years
1 year = 12 months
27.5 years = 27.5 × 12 = 330 months
Therefore, Karen take 330 months to pay off her mortgage.