I posted this in the mortgage section last night, but I haven't gotten any replys so maybe some of you can help me...

I just started my prelicensing classes and we are working on math first. I have to do an assignment for my next class that has about 30 questions on it dealing with real estate math. I had no problems with any of the questions except one. I am SOOOO stuck. I don't know why this question is so hard. I have read and reread all the info in the book on the topic but I just can't figure it out. I don't expect you to give me the answer, but if any of you can explain how I go about solving it I would be forever indebted to you. It is driving me crazy!

Ok, so here is the question:

A home valued at $168,500 has just had a 70% mortgage loan placed on it. The interest rate is 11.25%. The monthly payment is $1292.22 including principal and interest. What will the principal balance of the mortgage loan be after the next monthly payment is made?

So, I am obviously going about this the wrong way since it is a multiple choice question and I haven't been able to come up with anything even close to any of the choices. Here was my main thought process...

$168,500 value x 70 percent loan = $117,950 principal borrowed.

$117,950 x 11.25% interest rate = $13,269.38 anual interest. / 12 = 1105.78 monthly interest.

$1292.22 monthly payment - $1105.78 monthly interest = $186.44 monthly principal.

$117,950 total principal owed - $186.44 principal paid that month = $117,763.60 remaining principal.

Am I doing this totally wrong? or did I just get a wire crossed somewhere? I can't figure it out for the life of me! I did write that question EXACTLY as it is written on my worksheet.

Any help is GREATLY appreciated!

Is it a 30yr? Is it fixed?

That information was not provided. I copied the information EXACTLY as it was provided to me.

"A home valued at $168,500 has just had a 70% mortgage loan placed on it. The interest rate is 11.25%. The monthly payment is $1292.22 including principal and interest. What will the principal balance of the mortgage loan be after the next monthly payment is made?"

That is the question word for word.

Hmmm that's what I got also and seems most logical. Don't get too bummed out over one question. Check with your state and see how many questions are on math for the exam. It is possible the answers are wrong because I've ran into many. For us in California, my exam had only 6 questions. I put off studying the math part and just learned a simple formula. There was only math question I couldn't answer because it was 12 sentences long and I didn't want to get stuck. Funny too it was the first question and I was sweating it.

Hopefully someone can chime in and see how awful I am at math.

That's strange, because I don't know how they got that payment number. At 30yr fixed, payment would be 1145.60, 25yr fixed 1177.42, 20yr fixed 1237.59, 15yr fixed 1359.19. Sorry maybe someone else can help.

soontobe, I think you got it right, since length of loan is not mentioned.

Length of the loan is irrelevant. The interest is the rate*principle/12.

The new priciple is the old principle-principle paid.

Your work looks good... if your calculator works you're good.

Thank you everyone for your thoughts. I think maybe the answers on my worksheet are just wrong. I can't think of any other way to work it. I guess we will see what happens in class. I do appreciate your input.

What were the choices to this question because sometimes it can be helpful to work backwards from the choices if you are unsure?

The answers may be wrong. I came across a dozen which caused a few white hairs.

the provided choices were:

a) $137,892.34
b) $137,166.25
c) $171,666.25
d) $172,392.34


I did attempt to work backwards but had no success.

I still think my answer is correct and was somehow ommited from the options.

Ok, I had class tonight and I just wanted to let you all know that my answer is correct. She somehow got the wrong answers on our worksheets.

Thanks again for all your help. I am just starting classes so I will probly have more questions in the future.

Be prepared to run into a bunch of wrong answers. Even my live instructor bumbled on a few of them.

Glad to hear you got it right.

ok, haven;t gotten to the math yet, so I am curious enough to take a stab at it - you'll have to let us know what the answer is. Here is my take:

168500-30%=117950 principle
1292.22-11.25%=1146.85 towards principle each month
117950-1146.85=116803.15 principle left.
This is not even close to any of your answers options, so I must've missed something somewhere.

$117,763.56 is the answer. In my original post I show how to work the problem. (my original answer was $117,763.60, but I had my calc. set to show four decimal places, and when you set it for five you get a few cents difference.)

Go up and look at the original to see where you went wrong.