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.

Since Frank made his most recent EMI payment today, Frank needs 76,136.52 in order to pay off his mortgage today.

We follow these steps to arrive at the

We first calculate the EMI on loan taken out:

The EMI is nothing but P (constant amount paid or received periodically) in the Present Value of an Annuity formula. The formula is

Substituting the values from the question we get,

150000 = EMI* \left[ \frac{1 - (1+\frac{0.05}{12})^{-(25*12)}}{\frac{0.05}{12}} \right]

Solving we get,

We then construct the Amortization table attached below. At the end of 16 years or 192 periods (), we can see that the principal outstanding is $76,136.52.

answercompetitive advantage;

answerplace value;