Question

Shannon took out a $300,000, 15-year mortgage with an APR of 3.65%. The first month she made an extra payment of$400. What was her ending balance at the end of that first month?

Answer 1

To calculate the ending balance after making an extra mortgage payment, you need to calculate the regular monthly payment and subtract the extra payment from it.

Step-by-step explanation:

To calculate the ending balance after making an extra payment on a mortgage, we need to calculate the regular monthly payment and subtract the extra payment from it.

For Shannon's $300,000, 15-year mortgage with an APR of 3.65%, we can use the formula for calculating the monthly payment:

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

Where PMT is the monthly payment, P is the principal loan amount, r is the monthly interest rate, and n is the total number of monthly payments.

After calculating the monthly payment, subtract the extra payment of $400 to find the ending balance at the end of the first month.