Purchase Solution

Principal balance on a particular loan

Not what you're looking for?

Ask Custom Question

I have a 30-year $100,000 mortgage loan with an APR of 6% and monthly payments. In 12 years I will sell my home and pay off the mortgage. What is the principal balance on the loan?

Purchase this Solution
Solution Summary

Calculates the principal balance on the loan.

Solution Preview

Note: For the following answer the abbreviations have the following meanings

PVIF= Present Value Interest Factor
PVIFA= Present Value Interest Factor for an Annuity

They can be read from tables or calculated using the following equations
PVIFA( n, r%)= =[1-1/(1+r%)^n]/r%
PVIF( n, r%)= =1/(1+r%)^n

I have a 30-year $100,000 mortgage loan ...

Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Payment Amounts for Car Loans and Mortgages

    The balance on the loan decreases throughout the life of the loan with each payment. The loan balance decreases in a straight line. The principal paid increases from $314.25 in the first payment to $397.26 in the last payment.

  • Time Value of Money

    The annual payment on the car is $5000. You have just made a payment and have now decided to pay the loan off by repaying outstanding balance.

  • Amortizing Loan

    A) If the interest rate is 8%, show that the annual payment is $301.92 B) Fill in the table; show how much of each payment is interest verses principal repayment and the outstanding balance on the loan at each date.

  • Calculating annual payments on an amortizing loan

    If we multiply 301.92 by 2.577 we should get the loan balance. 301.92 X 2.577 = $778.05 This is the loan balance as we had calculated earlier. The solution explains how the principal balance reduces on an amortizing loan

  • Honda Accord Car: Loan Amortization Schedule

    As the principal balance reduces, larger portion of the monthly instalment is applied towards repayment of the principal as the interest expense declines due to the reduction in principal balance. This continues until the loan balance becomes NIL.

  • What is the principle balance on the amortized loan?

    What is the principal balance on the loan? Please see the attached file The solution explains how the calculate the principal balance after some payments have been made on a amortizing loan in an attached Excel file.

  • Annual payments - principal and loan

    X 8% = 11,972.40 Principal = 12,184.02-11,972.40 = 211.62 The solution explains how to calculate the annual payments on a loan and the break up between principal and interest for the first repayment

  • Mortgages and interest payments

    Compare these findings if he would have taken out a fix rate loan for the same period at 6.5%. Which do you think is the better deal?

  • The Dade Company is borrowing $300,000 for one year and payi

    11.25% -- The effective rate of interest with a 20% compensating balance = interest/principal - compensating balance x 360 days in the year / the number of days the loan is outstanding = 27,000 / 300,000 - 60,000 * 360 / 360 = 27,000 / 240,000

View More Related Solutions