Atticus purchased a home 5 years (60 months) ago and he is contemplating refinancing his home. However, he wants to know what his current mortgage balance is before he speaks to the bank so that he does not have to rely on bank telling him the number.  When Atticus purchased his home, he got a mortgage of $275,000 that was fully amortized for 30 years (meaning it will be paid off in 30 years) with a fixed interest rate of 4.25%. The loan has monthly payments of $1,352.83.  How much is the balance on the loan?

Answer (keystrokes for you HP 10bii financial calculator)

N (number of months) = 300 (This is how many months are left in the loan as 5 years have passed)

I/YR (interest rate/year) = 4.25% (this is the interest rate for his 30 year mortgage)

PV (present value of the loan) = ????  (this is what we are solving for.  This is the balance of the loan at the 300 month mark)

PMT (monthly payments) = -$1,352.83 (these are the monthly payments that Atticus makes. They are negative from Atticus' perspective as they are leaving his pocket every month)

FV (future value of loan) = 0 (the loan is fully amortizing, so after 300 months it is fully paid off)

After entering the above number into your financial calculator, the answer is $249,720.30. Meaning that after the loan has been paid on time for 5 years/60 months, the balance on the loan is $249,720.30. (Editor's Note: if you solved for PMT first with the original loan information, and then simply changed the N to 300, without reentering the PMT amount, the answer will be $249,721.17)

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