You just took out a mortgage for $285 600. Your monthly payments are $1 279.29, you are being charged a rate of 0.29% on the outstanding balance per month, and you expect to pay everything back in 30 years. 5 years from now you will have the opportunity to renegotiate your mortgage, what will be the balance you owe at that time?

Question

Quizplus · Accepted Answer

To find the balance owed 5 years from now, we can use the formula for the remaining balance on a mortgage, which involves understanding the amortization process. Given the monthly interest rate (0.29%), the monthly payment ($1,279.29), and the original loan amount ($285,600), we can calculate the remaining balance after 60 payments (5 years). The calculation involves the use of the formula for the remaining balance on an amortizing loan, which takes into account the number of payments made and the terms of the loan. After performing these calculations, the remaining balance comes out to be $256,086.72, which corresponds to option D.

You Just Took Out a Mortgage for $285 600