What is the equity of a house after 12 years with a 30-year loan at 4.82%?

[Niaboc67]

Homework Statement

James bought a house worth $308,000.00 and financed 85% of that amount. He has a 30-year loan at 4.82%. How much will he owe on the house after 12 years?

Then find the equity that James has from Item #4 above. His equity is the difference between the new value of the house which has increased by 1.5% compounded annually for the 12 years, and the amount that he still owes after 12 years.

Homework Equations

payment into a sinking fund R=S*i/((1+i)^n -1)

Future Value P=R*(1-(1+i)^-n)/i

Present value P=R*(1-(1+i)^-n)/i

The Attempt at a Solution

308,000.00 * 85/100 = 261,800.00

r = 4.82% / 12 = 0.00402 --> the monthly payment

I think i am suppose to plug the values into one formula first then another.

A=R*((1+i)^n -1)/i
261.800((1+.0482/12)^360-1)/.0482

Not sure if that is even correct...

Anyone know how to solve this?

 

[tnich]

It seems to me that the first thing you need to do is figure out what the monthly payment is. Your formula for A might get you there if you solved it for R, and used A as the initial loan principal.