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iRoar Portal X e Sign In or Sig × Inbox (MO-1 M Your Chegg.cu D csePub-Elec × e rinance questi F lls Roy oe Di x y Donald J. Trur x G population of C https://www.csepub.com/exercise/users answers/8297966/edit CSePub Home Book Store Independent Authors About Your Cart tems:Total: $99.99 View Cart A couple took out a 30-year mortgage 10 years ago. At that time, the mortgage was S318 200.00 with 7.32% APR and monthly compounding of interest. Today, the couple has been ottered 5326,000.00 tor their house. If the couple accepts the ofter, how much cash will they take trom the deal? The cash will be the ditterence between the sell price and what is owed on the loan Answer Format: Currency: Round to: 2 decimal places. Enter Answer Here Submit Answer + Prev Problem Al ProblemsNext Problem Contact Us Privacy Policy TeTIs Copyright 2018 Conley Smith Publishing. All Right reserved. 43 PM O Type here to search 9/26/2018 2

Explanation / Answer

Loan owed= Present value of remaining PMT

Here R=7.32/12 =0.61% as it it compounded monthly

Initial loan value= $318200

n = 30*12= 360 as it s componded monthly

so first we need to calculate PMT= r*Initial loan value/(1-(1+r)^-n)

PMT=(0.0061*318200)/(1-(1.0061^-360))

=1941.02/(1-0.112) =1941.02/0.888= $2185.81

Now we need to calculate the PV of remaining 20 Years of loan

PV=PMT*((1-(1+r)^-n)/r)

=2185.81*((1-0.232)/0.0061)= 2185.81*(0.768/0.0061)

= $275075.18

Cash Difference =326000-275075.18= $50924.82

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