We receive a mortgage loan for 20 years.. The mortgage rate is 6% per annum. Add

Question

We receive a mortgage loan for 20 years.. The mortgage rate is 6% per annum. Additionally, the monthly payment we ought to make to the bank to amortize the loan is $2, 500. Secondly, compute the remaining amount we still owe the bank, if we pay an additional single sum of $50,000 after 5 years. Thirdly, as part of this computation find how many more months, we will pay the bank to induce the loan expire. Fourthly, if we accumulate a lot by year 10(end of the year), how much would we give additionally to the lender to eliminate the loan? Fifthly, how much is the effective annual rate?

need answers with formula's shown

Explanation / Answer

Q1 P = L[c(1 + c)n]/[(1 + c)n - 1] P=Monthly instalment L=Pricipal Amount c=Monthly interest rate n=No of instalments 2500=L(C(1+.(06/12))^240/1+.(06/12))^240) 2500=L*005*(1.005^240)/(1.005^240-1) L=2500/((005*(1.005^240))/(1.005^240-1)) Loan Principal $3,48,951.93 Q2 B = L[(1 + c)n - (1 + c)p]/[(1 + c)n - 1] B=Remainin Loan Balance L=Pricipal Amount c=Monthly interest rate n=No of instalments P=Already paid instalments 348951*(((1.005^240)-(1.005^60))/((1.005^240)-1)) Principal After 5 Years $2,96,258.79 Less $50,000.00 Revised loan balance $2,46,258.79

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