Question

A young executive is going to purchase a vacation property for investment purposes. She needs to borrow $126,000.00 for 29 years at 4.8% compounded monthly, and will make monthly payments of $671.35. (Round all answers to 2 decimal places.)

What is the unpaid balance after 11 months? $______
During this time period, how much interest did she pay? $______

Answer 1

The unpaid balance after 11 months $124,116.45. During this time period, the interest did she pay $4,161.55.

Step-by-step explanation:

The young executive's monthly mortgage payment of $671.35 for a $126,000.00 loan at 4.8% compounded monthly over 29 years is accurate. Loan Details: The loan amount is $126,000.00, and the loan term is 29 years.

Interest Rate: The interest rate is 4.8%, compounded monthly. This is the interest rate at which the loan accrues interest each month.

Monthly Payment: The monthly mortgage payment is $671.35. This is the amount the borrower will pay each month to repay the loan.

Calculation Accuracy: The accuracy of the monthly payment is confirmed by calculating it using the loan amount, interest rate, and loan term. Using the formula for a fixed-rate mortgage payment, the calculated monthly payment matches the given $671.35.