You take a fixed-rate mortgage for $132,000 at 6.75% for 30 years,monthly payments.At the end of the second year,you unexpectedly inherit $18,000 from your now-favorite uncle.You decide to apply this $18,000 to the principal balance of your loan.How many payments are remaining after the extra lump sum payment is made?

Question

Quizplus · Accepted Answer

After making the lump sum payment, the remaining number of payments is approximately 233.33. This is calculated by first determining the monthly payment, then recalculating the loan balance after 24 payments, applying the $18,000, and finally recalculating the number of payments needed to pay off the remaining balance.

You Take a Fixed-Rate Mortgage for $132,000 at 6