Mortgage

[KBK]

Tess bought her house for $200,000 six years ago and has been paying off her 25 year mortgage of $170, 000 financed at 5.57% compounded monthly.

A. If her monthly payments are 1069.50, how much principal does she still owe on the house?
B.If the house is now worth 250,000, what is her equity?
Please provide the formulas so I can better understand the whole concept. THANKS

 

[tkhunny]

Please provide the formulas so I can better understand the whole concept.

Too bad these two purposes are at cross purposes.

Further, $1,069.50 is inconsistent with the other information. Where does that leave us?

Maybe Dennis can explain the mortgage concepts of Newfoundland and explain to me how we have consistent information.

After that, it should be obvious.

 

[Denis]

Maybe Dennins can explain the mortgage concepts of Newfoundland and explain to me how we ahve consistent information.

Ontario!
Explanation is simple: 5.57 should be 5.75 ; OBVIOUS typo that you should have noticed :shock:

 

[tkhunny]

Well, there you go, KBK. Are we any closer? Let's see what you get.

 

[KBK]

Yup, typo... 5.75 is the correct.

 

[KBK]

I need a formula... I am so clueless to be honest.

 

[Deleted member 4993]

These are standard problems - your textbook surely has worked out problems.

What is the principal amount?

What is the "monthly interest" rate?

What do you get from that?

Please share your work with us, indicating exactly where you are stuck - so that we may know where to begin to help you.

 

[Denis]

HINT:
A = amount borrowed, P = monthly payment

Balance owing after n months:
future value of A after n months - future value of P (annuity) after n months