Loan

mercredi 25 mars 2015

Problem 37.4

Julie bought a house with a 100,000 mortgage for 30 years being repaid with payments at the end of each month at an interest rate of 8% compounded monthly. What is the outstanding balance at the end of 10 years immediately after the 120th payment?



Problem 37.5

If Julie pays an extra 100 each month, what is the outstanding balance at the end of 10 years immediately after the 120th payment?



I was able to solve for problem 37.4 but I didn't get the answer for 37.5.



a=(1-(1+.08/12)^-360)/(.08/12)

p=100000/a

v=1/(1+.08/12)

Answer=(p+100)*(1-v^240)/(.08/12)





Loan

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