Asked by Donald
You borrow $150,000 to purchase a new house. The bank offers you a special 20 year loan with a 7% interest rate and you will make annual payments. How large will each payment be? If you want to sell your house after 7 years, how much will you owe and need to pay to pay off the loan?
Answers
Answered by
Reiny
150000 =PAY( 1 - 1.07^-20)/.07
solving for PAY, I got $ 14,158.94
Balance owing after 7 years
= 150000(1.07)^7 - 14158.94( 1.07^7 - 1)/.07
= $ 118.335.46
solving for PAY, I got $ 14,158.94
Balance owing after 7 years
= 150000(1.07)^7 - 14158.94( 1.07^7 - 1)/.07
= $ 118.335.46
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