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A Homeowner Is Anxious to Pay Off Their Mortgage

Question 94

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A homeowner is anxious to pay off their mortgage. After sending in their payment this month they are curious what the remaining principal balance will be. The bank's system is down so they ask you to calculate it for them. If the beginning mortgage balance was $3,000 and they made a $750 payment, with an annual interest rate of 6%. What is the remaining principal balance after the payment? What will the remaining principal balance be after two payments? Show your work.

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$2,420.00 balance after first ...

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