Question

Sonya has a $363,000 mortgage at 3.41% compounded monthly with end of month payments of $3,340.00.

1) How many payments will Sonya have to make to amortize this loan?

 (rounded to the next higher whole number)

2) How much will her final mortgage payment be?

$ (enter a positive value)

Answer 1

a) The number of payments required to amortize the mortgage can be ascertained by using the 'Nper' function in Excel. The computation of number of payments is as follows:

Thus, the total number of payments required to amortize the mortgage is 130.

b) The final mortgage payment can be ascertained by multiplying the monthly payment amount with the total number of payments. The calculation is as follows:

$Final \space mortgage\space payment = Monthly \space payments × Total \space number \space of \space payments \\=3,340 × 130 \\=\$434,200$

Thus, the final mortgage payment is $434,200.