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Thread: How can i calculate Mortgage at the end of the year??

  1. #1 How can i calculate Mortgage at the end of the year?? 
    Junior Member
    Join Date
    May 2013
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    1
    I have
    If the loan amount is = 100000
    and the loan term is = 10 years
    and interest is = 5.8%

    and i calculated fortnightly repayment as
    P =(100000 * .0572275/26) / [1 - 1 / (1 + .0572275/26)^260] = ~505.52

    But i am stuck here that how the balance at the end of the first year is solved = 92402
    and similarly for second year = 84352????

    plz help me !!!
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  2. #2  
    Junior Member
    Join Date
    Jun 2013
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    9
    Quote Originally Posted by zeeshanjamal View Post
    I have
    If the loan amount is = 100000
    and the loan term is = 10 years
    and interest is = 5.8%

    and i calculated fortnightly repayment as
    P =(100000 * .0572275/26) / [1 - 1 / (1 + .0572275/26)^260] = ~505.52

    But i am stuck here that how the balance at the end of the first year is solved = 92402
    and similarly for second year = 84352????

    plz help me !!!
    Whats wrong with that ?
    balance owing is only reduced $8000 in the first year, because so much of the repayments go to pay off interest. As the balance is reduced, interest is reduced and the repayments reduce the balance moer each year.. The loan is repayed faster and faster toward the end.
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  3. #3  
    Junior Member river_rat's Avatar
    Join Date
    Feb 2013
    Location
    South Africa
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    12
    To get the principle outstanding just PV the value of all outstanding payments
    As is often the case with technical subjects we are presented with an unfortunate choice: an explanation that is accurate but incomprehensible, or comprehensible but wrong.
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