Alesha is wondering what she will be owing on her mortgage at the end of the five year term. She has a $488,000

Question

Alesha is wondering what she will be owing on her mortgage at the end of the five year term. She has a $488,000 mortgage with a semi-annual interest rate of 5.1%, amortized over 25 years. If she continues paying the same payment based on the 25 year amortization, what will she owe at the end of the five year term?

Help In Homework · Accepted Answer

PVOrdinary Annuity = C*[(1-(1+i/(f*100))^(-n*f))/(i/(f*100))] C = Cash flow per period i = interest rate n = number of payments I f = frequency of payment 488000= Cash Flow*((1-(1+ 5.1/1200)^(-25*12))/(5.1/1200)) Cash Flow = 2881.3 Using Calculator: press buttons "2ND"+"FV" then assign PV =-488000 I/Y =5.1/12 N =25*12 FV = 0 CPT PMT Using Excel =PMT(rate,nper,pv,fv,type) =PMT(5.1/(12*100),12*25,,488000,) PVOrdinary Annuity = C*[(1-(1+i/(f*100))^(-n*f))/(i/(f*100))] C = Cash flow per period i = interest rate n = number of payments I f = frequency of payment PV= 2881.3*((1-(1+ 5.1/1200)^(-20*12))/(5.1/1200)) PV = 432957.59 Using Calculator: press buttons "2ND"+"FV" then assign PMT =2881.3 I/Y =5.1/12 N =20*12 FV = 0 CPT PV Using Excel =PV(rate,nper,pmt,FV,type) =PV(5.1/(12*100),12*20,,PV,)

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Alesha is wondering what she will be owing on her mortgage at the end of the five year term

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