Suppose you take an FRM of $150,000 at7.5% for 30 years. If you repay this mortgage at the end of year five, what is the outstanding balance? Question 13 options:1)$52,3422)$87,0713)$141,5744)$141,9265)none of the above Solution The monthly payment will be 1048 $.At the end of 5 years 60 payments will be completed. The principle remaining will be 141,926$ .Answer is option 4. Repayment schedule. Payment 1$1,048.82$937.50$111.32$149,888.68 Payment 2$1,048.82$936.80$112.02$149,776.66 Payment 3$1,048.82$936.10$112.72$149,663.94 Payment 4$1,048.82$935.40$113.42$149,550.52 Payment 5$1,048.82$934.69$114.13$149,436.39 Payment 6$1,048.82$933.98$114.84$149,321.55 Payment 7$1,048.82$933.26$115.56$149,205.99 Payment 8$1,048.82$932.54$116.28$149,089.71 Payment 9$1,048.82$931.81$117.01$148,972.70 Payment 10$1,048.82$931.08$117.74$148,854.96 Payment 11$1,048.82$930.34$118.48$148,736.48 Payment 12$1,048.82$929.60$119.22$148,617.2 6Payment 13$1,048.82$928.86$119.96$148,497.30 Payment 14$1,048.82$928.11$120.71$148,376.59 Payment 15$1,048.82$927.35$121.47$148,255.12 Payment 16$1,048.82$926.59$122.23$148,132.89 Payment 17$1,048.82$925.83$122.99$148,009.90 Payment 18$1,048.82$925.06$123.76$147,886.14 Payment 19$1,048.82$924.29$124.53$147,761.61 Payment 20$1,048.82$923.51$125.31$147,636.30 Payment 21$1,048.82$922.73$126.09$147,510.21 Payment 22$1,048.82$921.94$126.88$147,383.33 Payment 23$1,048.82$921.15$127.67$147,255.66 Payment 24$1,048.82$920.35$128.47$147,127.19 Payment 25$1,048.82$919.54$129.28$146,997.91 Payment 26$1,048.82$918.74$130.08$146,867.83 Payment 27$1,048.82$917.92$130.90$146,736.93 Payment 28$1,048.82$917.11$131.71$146,605.22 Payment 29$1,048.82$916.28$132.54$146,472.68 Payment 30$1,048.82$915.45$133.37$146,339.31 Payment 31$1,048.82$914.62$134.20$146,205.11 Payment 32$1,048.82$913.78$135.04$146,070.07 Payment 33$1,048.82$912.94$135.88$145,934.19 Payment 34$1,048.82$912.09$136.73$145,797.46 Payment 35$1,048.82$911.23$137.59$145,659.87 Payment 36$1,048.82$910.37$138.45$145,521.42 Payment 37$1,048.82$909.51$139.31$145,382.11 Payment 38$1,048.82$908.64$140.18$145,241.93 Payment 39$1,048.82$907.76$141.06$145,100.87 Payment 40$1,048.82$906.88$141.94$144,958.93 Payment 41$1,048.82$905.99$142.83$144,816.10 Payment 42$1,048.82$905.10$143.72$144,672.38 Payment 43$1,048.82$904.20$144.62$144,527.76 Payment 44$1,048.82$903.30$145.52$144,382.24 Payment 45$1,048.82$902.39$146.43$144,235.81 Payment 46$1,048.82$901.47$147.35$144,088.46 Payment 47$1,048.82$900.55$148.27$143,940.19 Payment 48$1,048.82$899.63$149.19$143,791.00 Payment 49$1,048.82$898.69$150.13$143,640.87 Payment 50$1,048.82$897.76$151.06$143,489.81 Payment 51$1,048.82$896.81$152.01$143,337.80 Payment 52$1,048.82$895.86$152.96$143,184.84 Payment 53$1,048.82$894.91$153.91$143,030.93 Payment 54$1,048.82$893.94$154.88$142,876.05 Payment 55$1,048.82$892.98$155.84$142,720.21 Payment 56$1,048.82$892.00$156.82$142,563.39 Payment 57$1,048.82$891.02$157.80$142,405.59 Payment 58$1,048.82$890.03$158.79$142,246.

1. Suppose you take an FRM of $150,000 at7.5% for 30 years. If you repay this mortgage at the
end of year five, what is the outstanding balance?
Question 13 options:1)$52,3422)$87,0713)$141,5744)$141,9265)none of the above
Solution
The monthly payment will be 1048 $.At the end of 5 years 60 payments will be completed.
The principle remaining will be 141,926$ .Answer is option 4.
Repayment schedule.
Payment 1$1,048.82$937.50$111.32$149,888.68
Payment 2$1,048.82$936.80$112.02$149,776.66
Payment 3$1,048.82$936.10$112.72$149,663.94
Payment 4$1,048.82$935.40$113.42$149,550.52
Payment 5$1,048.82$934.69$114.13$149,436.39
Payment 6$1,048.82$933.98$114.84$149,321.55
Payment 7$1,048.82$933.26$115.56$149,205.99
Payment 8$1,048.82$932.54$116.28$149,089.71
Payment 9$1,048.82$931.81$117.01$148,972.70
Payment 10$1,048.82$931.08$117.74$148,854.96
Payment 11$1,048.82$930.34$118.48$148,736.48
Payment 12$1,048.82$929.60$119.22$148,617.2
6Payment 13$1,048.82$928.86$119.96$148,497.30
Payment 14$1,048.82$928.11$120.71$148,376.59
Payment 15$1,048.82$927.35$121.47$148,255.12
Payment 16$1,048.82$926.59$122.23$148,132.89
Payment 17$1,048.82$925.83$122.99$148,009.90
Payment 18$1,048.82$925.06$123.76$147,886.14
Payment 19$1,048.82$924.29$124.53$147,761.61
Payment 20$1,048.82$923.51$125.31$147,636.30
Payment 21$1,048.82$922.73$126.09$147,510.21
Payment 22$1,048.82$921.94$126.88$147,383.33
Payment 23$1,048.82$921.15$127.67$147,255.66
Payment 24$1,048.82$920.35$128.47$147,127.19
Payment 25$1,048.82$919.54$129.28$146,997.91
Payment 26$1,048.82$918.74$130.08$146,867.83

2. Payment 27$1,048.82$917.92$130.90$146,736.93
Payment 28$1,048.82$917.11$131.71$146,605.22
Payment 29$1,048.82$916.28$132.54$146,472.68
Payment 30$1,048.82$915.45$133.37$146,339.31
Payment 31$1,048.82$914.62$134.20$146,205.11
Payment 32$1,048.82$913.78$135.04$146,070.07
Payment 33$1,048.82$912.94$135.88$145,934.19
Payment 34$1,048.82$912.09$136.73$145,797.46
Payment 35$1,048.82$911.23$137.59$145,659.87
Payment 36$1,048.82$910.37$138.45$145,521.42
Payment 37$1,048.82$909.51$139.31$145,382.11
Payment 38$1,048.82$908.64$140.18$145,241.93
Payment 39$1,048.82$907.76$141.06$145,100.87
Payment 40$1,048.82$906.88$141.94$144,958.93
Payment 41$1,048.82$905.99$142.83$144,816.10
Payment 42$1,048.82$905.10$143.72$144,672.38
Payment 43$1,048.82$904.20$144.62$144,527.76
Payment 44$1,048.82$903.30$145.52$144,382.24
Payment 45$1,048.82$902.39$146.43$144,235.81
Payment 46$1,048.82$901.47$147.35$144,088.46
Payment 47$1,048.82$900.55$148.27$143,940.19
Payment 48$1,048.82$899.63$149.19$143,791.00
Payment 49$1,048.82$898.69$150.13$143,640.87
Payment 50$1,048.82$897.76$151.06$143,489.81
Payment 51$1,048.82$896.81$152.01$143,337.80
Payment 52$1,048.82$895.86$152.96$143,184.84
Payment 53$1,048.82$894.91$153.91$143,030.93
Payment 54$1,048.82$893.94$154.88$142,876.05
Payment 55$1,048.82$892.98$155.84$142,720.21
Payment 56$1,048.82$892.00$156.82$142,563.39
Payment 57$1,048.82$891.02$157.80$142,405.59
Payment 58$1,048.82$890.03$158.79$142,246.80
Payment 59$1,048.82$889.04$159.78$142,087.02
Payment 60$1,048.82$888.04$160.78$141,926.24