Johnny purchased a beach house in California and he took out a $200,000, 30-year loan with a 7% interest (paid annually). He just made the payment. Given the financial situation in world markets he has decided to pay the mortgage off by repaying the outstanding balance. What is the payoff amount if:

1.          There are ten years left on the mortgage

2.          There are fifteen years left on the mortgage

Answer rating: 100% (QA)

1 To calculate the payoff amount of a mortgage we need to use the present value formula for an annui... View the full answer