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Question 884499: Your friend has a current balance of $150,000 on a $185,000 loan at 6.0% interest for 30 years. The monthly P&I is $1,109.17. What will be the mortgage balance after the next payment?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! it depends on if payment is made at the end of the month or at the beginning of the month.
most loan payments are made at the end of the month.
interest is charged for the month and added to the balance and then the payment is subtracted from that new balance.
at the beginning of the month the current balance is 150,000
interest for the month will be .005 * 150,000 which will be equal to 750.
add the interest charges for the month and then subtract the monthly payment and you will get a new balance of 150,000 + 750 - 1109.17 = 149640.83 at the end of the month.
the end of the current month is considered to be the same time point as the beginning of the next month.
.005 interest is calculated by taking .06 annual interest and dividing it by 12.
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