Asked by
Aichata Makadji
on Dec 09, 2024Verified
You have a 25-year $800,000 mortgage with a 4.5% rate of interest (compounded monthly) that you make monthly payments on. What is the balance of the loan at the end of year 22?
A) $141,483
B) $145,483
C) $149,483
D) $153,483
E) $156,483
Compounded Monthly
A method of calculating interest where the accumulated interest is added to the principal sum each month, leading to an increase in the total amount of interest earned.
Monthly Payments
Regular payments made over a period, often in the context of loans or leases where the total amount owed is divided into equal installments over time.
Mortgage
A legal agreement by which a bank or other creditor lends money at interest in exchange for taking the title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.
- Comprehend the fundamentals of loan repayment and compute monthly installments for different interest rates and durations.
Verified Answer
RC
Learning Objectives
- Comprehend the fundamentals of loan repayment and compute monthly installments for different interest rates and durations.