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# Jim Franklin recently purchased a home for $300,000 on which he made a down payment of $100,000. He obtained a 30-year mortgage to finance the balance on which he pays a fixed annual rate of 6%. If he makes regular, fixed monthly payments, what loan balance will remain just after the 48th payment?

Question:

A
$189,229.

Explaination

With monthly payments, we need a monthly rate:

6% / 12 = 0.5%. Next, solve for the monthly payment. The calculator keystrokes are:

PV = 200,000; FV = 0; N = 360; I/Y = 0.5; CPT -> PMT = -$1,199.10. The balance at any time on an amortizing loan is the present value of the remaining payments. There are 312 payments remaining after the 48th payment is made. The loan balance at this point is: PMT = -1,199.10; FV = 0; N = 312; I/Y = 0.5; CPT ->PV = 5189,228.90.

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