George Looney has just taken a $375,000 mortgage loan. It will be paid back with monthly payments of $2,400 in arrears for 25 years. The interest rate is 6% compounded monthly. How much of George's mortgage will remain to be paid after 20 years (ie. What will the mortgage balance be in 20 years)? Real Rate of Return = (nominal, annual rate of return- annual inflation rate )/(1+ inflation rate ) After-Tax Rate of Return = nominal, annual rate of return X (1- Marginal Tax Rate) Real After-Tax Rate of Return = (after-tax rate of return - annual inflation rate )/(1+inflation rate) $114,423,08 $109,125.96 $132,428.53 $126,884.03