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?

Question

Quizplus · Accepted Answer

The remaining balance after the payment of the fifth annual installment can be calculated using the formula for the remaining balance of an amortizing loan or by using a financial calculator. The calculation involves finding the present value of the remaining 15 payments (20 years total minus 5 years paid) at the original interest rate of 6%. The correct calculation results in a remaining balance of $211,689.53.

John House Has Taken a 20-Year, $250,000 Mortgage on His