Suppose you purchase a home for $150,000 by paying a 20% down payment and signin

Question

Suppose you purchase a home for $150,000 by paying a 20% down payment and signing a 30 year mortgage on the remianing $120,000 balance. The fixed annual rate is 3.6% com pounded monthly. Your monthly payment is $546. After making these payments for 20 years (240 months) you elect to pay off the home and sell. The fair market value of the home $210,000. What is the loan payoff on the remaining 120 monthly payments of $546? ___________ Show formula used here: How much equity would you have at that time (to the nearest dollar)? __________

Explanation / Answer

monthly installent = $546

loan payoff on remaining 120 months = 546 * 120 = $65520

market value of home is = $210,000

equity left at the time of sale = 210,000-65520=$144480

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