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RL Enterprises issues a $600,000 adjustable rate mortgage note on January 1, 2020. The initial interest rate is 7%, but will move up or down

RL Enterprises issues a $600,000 adjustable rate mortgage note on January 1, 2020. The initial interest rate is 7%, but will move up or down each year with the market rate. Annual December 31 installment payments are $75,000, exclusive of taxes and insurance. If RL's interest rates are 7% in 2020, 6.5% in 2021, 7% in 2022, and 8% in 2023, what is RL's principal balance after the December 31, 2023 payment?

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SOLUTION To calculate RL Enterprises principal balance after the December 31 2023 payment we need to determine the principal paid off each year and adjust the balance based on the interest rate change... blur-text-image

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