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5 June, 12:53

Frank purchased his house 16 years ago by taking out a 25-year mortgage for $150,000. the mortgage has a fixed interest rate of 5 percent compounded monthly. if he wants to pay off his mortgage today, how much money does he need? he made his most recent mortgage payment earlier today.

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  1. 5 June, 12:57
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    The current value of the mortgage will be given by:

    A=P (1+r/100) ^n

    where:

    P=$150,000

    r=5%

    n=16 years

    therefore:

    A=150000 (1+5/100) ^16

    A=150000 (1.05) ^16

    A=$201,014.35

    If He wants to pay off his mortgage now, he needs $201,014.35
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