Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

When you purchased your house, you took out a 3 0 - year annual - payment mortgage with an interest rate of 1 0 %

When you purchased your house, you took out a 30-year annual-payment mortgage with an interest rate of 10% per year. The annual payment on the mortgage is $18,000 You have just made a payment and have now decided to pay the mortgage off by repaying the outstanding balance.
a. What is the payoff amount if you have lived in the house for 10 years(so there are 20 years left on the mortgage)?
b. What is the payoff amount if you have lived in the house for 25 years(so there are 5 years left on the mortgage)?
c. What is the payoff amount if you have lived in the house for 10 years(so there are 20 years left on the mortgage) and you decide to pay off the mortgage immediately before the 10th payment is due? Assume the same payment of $18,000 per year and an interest rate of 10% per year.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Lawrence J Gitman, Chad J Zutter

7th Edition

0133546403, 9780133546408

More Books

Students also viewed these Finance questions

Question

Describe the problems in the administration of disciplinary action.

Answered: 1 week ago

Question

Explain discipline and disciplinary action.

Answered: 1 week ago