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    Amortizing Loan

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    You take out a 20-year $150,000 mortgage loan with an APR of 5 percent and monthly payments. In 10 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan?

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    Solution Preview

    We have to use annuity formula to solve the problem.

    PVA = W x 1 - 1 where PVA is the present value of loan
    (1 + ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer the request of the assignment in text.