A homeowner has $200,000 home with a 20-year mortgage,paid monthly at 7.25% APR.After five years he receives $50,000 as an inheritance.If he pays this $50,000 toward his mortgage along with his regular payment,by approximately how many years will it reduce the amount of time it takes him to pay off his mortgage?

Question

Quizplus · Accepted Answer

Paying an additional $50,000 towards the principal will significantly reduce the interest paid over the life of the loan, resulting in approximately 6 years being shaved off the mortgage term.

A Homeowner Has $200,000 Home with a 20-Year Mortgage,paid Monthly