You have a 25-year $800,000 mortgage with a 4.5% rate of interest (compounded monthly) that you make monthly payments on. What is the balance of the loan at the end of year 12?

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The correct answer is A because the balance of the loan at the end of year 12 is $524,450. This can be calculated using the formula for the balance of a loan:B = P * (1 + r/n)^(nt) - (P * r/n) * ((1 + r/n)^(nt) - 1)where:B is the balance of the loanP is the principal amount of the loanr is the annual interest raten is the number of times per year that interest is compoundedt is the number of yearsIn this case, the principal amount of the loan is $800,000, the annual interest rate is 4.5%, interest is compounded monthly (so n = 12), and the number of years is 12. Plugging these values into the formula, we get:B = 800000 * (1 + 0.045/12)^(12*12) - (800000 * 0.045/12) * ((1 + 0.045/12)^(12*12) - 1)B = 800000 * (1.00375)^144 - (800000 * 0.00375) * ((1.00375)^144 - 1)B = 800000 * 1.6528 - (30000) * (1.6528 - 1)B = 1322240 - 45280B = $524,450

You Have a 25-Year $800,000 Mortgage with a 4