You just entered into a $150,000 30-year home mortgage at an annual interest rate of 4.25% making monthly payments of $737.91.Suppose you add an additional payment of $295.97 each month to the $737.91 house payment making your total monthly payments equal to $1,033.88.This extra amount is applied against the principal of the original loan.How long will it take you to pay off your loan of $150,000? Use a calculator to determine your answer.

Question

Quizplus · Accepted Answer

By adding an additional payment of $295.97 to the monthly payment of $737.91, the new total monthly payment becomes $1,033.88. Using a loan repayment calculator, it will take approximately 206 months or 17 years and 2 months to pay off the loan of $150,000 at an annual interest rate of 4.25%. Opting to make additional payments will shorten the life of the loan, and the borrower can expect to pay it off much faster.

You Just Entered into a $150,000 30-Year Home Mortgage at an Annual