Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. two years ago you took out a mortgage at 4.5%. the

Two years ago you took out a mortgage at 4.5%. The initial balance of the loan...

Free

70.2K

Verified Solution

Question

Finance

Two years ago you took out a mortgage at 4.5%. The initialbalance of the loan was $200,000 and it was for 25 years (300months.) Today, you observe that you could take out a new loan at4.25% (with a 300 month term), but you would have to pay $5,000 inclosing and other fees.

What is the current value of the loan (liability from yourperspective)?

*Note: The answer is $195,579.52. I want to know how to get theanswer with a financial calculator.

Answer & Explanation Solved by verified expert
4.2 Ratings (591 Votes)

First we calculate using PMT

I/Y = 4.5%/12 = 0.375%

N = 300

PV = 200000

FV = 0

PMT = -1111.66

Then use simple maths to calculate interest per month and calculate resulting principal and add $5000 at the end to reach the total loan liability today.

4.5%/12 0.3750%
Loan Balance PMT Interest for the month Principal paid in the month
1 200000 ₹ -1,111.66 750.00 (200000*1*0.375%) ₹ -361.66 (PMT + Interest)
2 ₹ 1,99,638.34 ₹ -1,111.66 748.64 ₹ -363.02
3 ₹ 1,99,275.31 ₹ -1,111.66 747.28 ₹ -364.38
4 ₹ 1,98,910.93 ₹ -1,111.66 745.92 ₹ -365.75
5 ₹ 1,98,545.18 ₹ -1,111.66 744.54 ₹ -367.12
6 ₹ 1,98,178.06 ₹ -1,111.66 743.17 ₹ -368.50
7 ₹ 1,97,809.56 ₹ -1,111.66 741.79 ₹ -369.88
8 ₹ 1,97,439.69 ₹ -1,111.66 740.40 ₹ -371.27
9 ₹ 1,97,068.42 ₹ -1,111.66 739.01 ₹ -372.66
10 ₹ 1,96,695.76 ₹ -1,111.66 737.61 ₹ -374.06
11 ₹ 1,96,321.71 ₹ -1,111.66 736.21 ₹ -375.46
12 ₹ 1,95,946.25 ₹ -1,111.66 734.80 ₹ -376.87
13 ₹ 1,95,569.38 ₹ -1,111.66 733.39 ₹ -378.28
14 ₹ 1,95,191.10 ₹ -1,111.66 731.97 ₹ -379.70
15 ₹ 1,94,811.40 ₹ -1,111.66 730.54 ₹ -381.12
16 ₹ 1,94,430.28 ₹ -1,111.66 729.11 ₹ -382.55
17 ₹ 1,94,047.73 ₹ -1,111.66 727.68 ₹ -383.99
18 ₹ 1,93,663.74 ₹ -1,111.66 726.24 ₹ -385.43
19 ₹ 1,93,278.32 ₹ -1,111.66 724.79 ₹ -386.87
20 ₹ 1,92,891.45 ₹ -1,111.66 723.34 ₹ -388.32
21 ₹ 1,92,503.12 ₹ -1,111.66 721.89 ₹ -389.78
22 ₹ 1,92,113.34 ₹ -1,111.66 720.43 ₹ -391.24
23 ₹ 1,91,722.10 ₹ -1,111.66 718.96 ₹ -392.71
24 ₹ 1,91,329.40 ₹ -1,111.66 717.49 ₹ -394.18
25 ₹ 1,90,935.22
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A A solid and a hollow sphere of same diameter and same material when heated...

Physics
Q

tensity at the end on position of an electric dipole Question 14 3 A charged...

Physics
Q

1 point Calculate the distance between the lines and L 1 1t y 4 31...

Geometry
Q

Graph the following ellipse Give the domain range center vertices endpoints of the minor axis...

Geometry
Q

Convert 2093 to a numeral in base 3 2093

Basic Math
Q

Of 23 employees at a local supermarket, 11 work as cashiers and 12 stock shelves....

Basic Math
Q

The midpoint of a segment is (-6, -5) and one endpoint is (1, 3). Find...

Basic Math
Q

A sample of 15 measurements of the breaking strengths of cotton threads gave a mean...

Basic Math
Q

ev Step 2 of 3 Use synthetic division to identify integer bounds of the real...

Algebra
Q

Required information [The following information applies to the questions displayed below.) Corrigan Enterprises is studying...

Accounting
Q

Nolan Co. purchased some equipment 3 years ago. The companys required rate of return is...

Accounting
Q

At the beginning of June, Circuit Country has a balance in Inventory of $2,550. The...

Accounting