Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
You have just sold your house for $1,000,000 in cash
You have just sold your house for $1,000,000 in cash. Your mortgage was originally a 30-year mortgage with monthly payments and had an initial balance of $800,000. The mortgage is currently exactly 18.5 years old, and you have just made a payment. If the interest rate on the mortgage is 5.25% p.a. (with monthly compounding), how much cash will you have from the sale once you pay off the mortgage? (Round to the nearest dollar).
a. $456,931 b. $626,635 c. $543,069 d. $540.661 e. $459,340
Expert Solution
Answer
option c $543,069
Explanation;
Present monthly installment =
Remaining amount after 18.5 years
Ramaining Amount = Formula
Ramaining Amount =
PV= $800,000
payment = $4417.63
Rate = 5.25%/12 = .4375% per month
n = 18.5 years x 12 = 222
= 800,000*(1+.4375%)^222 - 4417.63*[(1+ .4375%)^222 - 1]/.4375%
= 800,000*2.635654576 - 4417.63*[(2.635654576 - 1]/.4375%
=2108523.661 - 4417.63*373.8639031
=2108523.661 - 1651592.394
= $456931.27
House selling amount = $1,000,000
Loan net pay off = $456,931.27
Net cash received after paying loan= $1,000,000 - $456,931.27 = $543,068.73 or $543,069
please see the attached file for the complet solution.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
