Five years ago, you bought a house for $151,000, with a down payment of $30,000, which meant you took out a loan for $121,000. Your interest rate was 5.75% fixed. You would like to pay more on your loan. You check your bank statement and find the following information:

Question

Five years ago, you bought a house for $151,000, with a down payment of $30,000, which meant you took out a loan for $121,000. Your interest rate was 5.75% fixed.  You would like to pay more on your loan. You check your bank statement and find the following information:

Escrow payment

$211.13

Principle and Interest payment

$706.12

Total Payment

$917.25

Current Loan Balance

$112,242.47

Explain how much additional money you would need to add to your monthly payment to pay off your loan in 20 years instead of 25.

Henry · Answer

P = (Po*r*t)/(1-(1+r)^-t).

Po = $112,242.47.

r = (5.75%/12) / 100% = 0.0048 = Monthly
% rate expressed as a decimal.

t = 12mo./yr * 20yrs = 240 Months.

Plug the above values in the given Eq
and solve for P.
Answer:P = $189,282.43
Monthly(I+P)=P/t=189282.43 / 240=$788.51

788.51 - 706.12 = $82.39 Higher.
This amount will be added to the previous monthly payment of $917.25.