September 2022
Beginner
560 pages
17h 36m
English
This section shows that, under the principal amortization schedule described in the text, the balance outstanding at any time equals the present value of the remaining payments at the original mortgage rate. Let
be the term of the mortgage, in months; let
be the mortgage rate; let
be the monthly payment, and let
be the balance outstanding at the end of month
,
. By definition, as discussed in the text,
If the balance outstanding at the end of month
does equal the present value of the remaining payments at the rate , then,
According to the logic of the amortization table, ...