Question

Find the unpaid balance on the debt. (Round your answer to the nearest cent.)

After 6 years of monthly payments on $190,000 at 3% for 25 years.

Answer 1

unpaid balance is $156439.86

Explanation:

present value= $190000

rate = 3% monthly = 3/12 = 0.25 % = 0.0025

time = 25 year = 25 × 12 300

to find out

the unpaid balance

solution

first we calculate monthly payment

payment = principal ( 1- (1+r)^(-t) /r )

and we put all value here

190000 = principal ( 1- (1+0.0025)^(-300) / 0.0025 )

principal = 190000 / ( 1- (1+0.0025)^(-300) / 0.0025 )

principal = 901

so after 6 year unpaid is

present value = principal ( 1- (1+r)^(-t) /r )

put here principal 901 and rate 0.0025 and time 300 - (year )

time = 300 - (6*12) = 300 - 96 = 228

payment = 901 ( 1- (1+0.0025)^(-228) / 0.0025 )

payment = 901 ( 713.63)

so unpaid balance is $156439.86