You have decided to refinance your mortgage. You plan to borrow whatever is outs

Question

You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $3,120 and you have made every payment on time. The ongina term of the mortgage was 30 years, and he mortgage is exactly four years and eight months old You have ust made your mont i pa men·The mortgage nerest rate s7S00 How much. do you owe on the mortgage today? (Note: Be careful not to round any intermediate steps less than six decimal places.) The amount you owe today is s (Round to the nearest dollar.)

Explanation / Answer

Given Information

Monthly payment -$3120

N left = (30*12)-(12*4+8)= 360-56= 304 Months

Rate= 7.5% annually so monthly will be 7.5/12= 0.625%

How much we owe today = PV of remaining payments

PV=PMT*((1-(1/(1+r)^n))/r

=3120*((1-(1/(1.00625^304)))/0.00625)

= 3120*(1-(1/6.646478))/0.00625)

= 3120*(0.85/0.00625)

=424092.56= 424093

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