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Mortgage Payoff: You take out a 30-year fixed rate mortgage for a house. The amount borrowed is $300,000. The interest rate is 4% per year

  1. Mortgage Payoff: You take out a 30-year fixed rate mortgage for a house. The amount borrowed is $300,000. The interest rate is 4% per year compounded monthly. You decide to sell the house immediately after the 60thpayment (five years). How much do you still owe on the loan?
  2. What is the total amount you have paid the lender by the time you sell the house?
  3. How much principal have you paid the lender by the time you sell the house?
  4. How much interest have you paid the lender by the time you sell the house?
  5. What fraction of your payments went to reducing the principal?

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