Question

This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $112,681 left to pay on your loan. Your house is now valued at $190,000. Your current situation How much of the original loan have you paid off? (i.E, how much have you reduced the loan balance by? Keep in mind that interest is charged each month - it's not part of the loan balance.)

Answer 1

The below is the first of paragraph in the question which is missing:

Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.

$22,319.00

Explanation:

In order to determine the portion of the original loan that has been paid off,we need to ascertain the original loan amount as below:

loan amount=purchase price of the home-down payment

purchase price is $150,000

down-payment =10%*$150,000=$15,000

loan amount=$150,000-$15,000=$135,000

If the loan amount has reduced to $112,681,hence the loan amount paid off is the difference between the original loan amount and the balance now:

original loan paid off=$135,000-$112,681=$22,319.00