George Looney has just taken a $375,000 mortgage loan. It will be pald back with monthly payments of 52,400 in arreare for 25 years. The interest rate is 6% compounded monthly. How much of George's mortgage will remain to be paid atter 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 ) 5114,423,08 $132,428.53 $126,804,03 $109,125.96