the deposit is 50,000.
the mortgage is 700,000 - 50,000 = 650,000.
the loan term is for 5 years * 12 = 60 months.
the interest rate is 18% per year compounded monthly = 18/12 = 1.5% per month.
use a financial calculator to determine the monthly payment.
set present value = 650,000
set future value = 0
set interest rate per momnth = 1.5
set number of payments = 60
set payments at the end of each month.
calculator tells you that the monthly payment is 16,505.73 at the end of each month for 60 months.
she stops paying after the 6th payment.
the remaining balance after the 6th payment is equal to 607,914.85.
this remaining balance is not paid for 3 months.
the interest is still being charged.
1.015^3 * that = 635,683.41
that's how much is left to pay on the loan.
the original loan was for 60 months.
take away 6 months that were paid plus 3 months that were not paid = 9 months already spent.
therefore, the remaining balance needs to be paid over 60 - 9 = 51 months.
use the financial calculator again with interest rate of 1.5% per month to pay off the remaining balance of 635,683.41 for over 51 months = monthly payment of 17,922.90 required for the balance of the loan.
here's what it looks like in an excel spreadsheet analyis.
the first and last few months are shown only.
column H is the remaining balance for payments shown in cell K2.
column i is the remaining balance for payments shown in cell L2.
the interest rate per month is shown in cell J2.
this is the interest rate per month, not the percent interest rate per month, which is 1.5%.
the payments in cell K2 are applied for the remaining balance in column H until the 6th month, at which point they are stopped and interest is accrued for the next 3 months, after which payments in cell L2 are applied for the remaining balance in column I.