Answer:
$543,069
Explanation:
The starting point of this analysis is to determine the monthly payment under the mortgage using excel pmt function as shown below:
=pmt(rate,nper,-pv,fv)
rate=monthly interest rate=5.25% /12
nper=number of monthly payments in 30 years=30*12=360 months
pv=mortgage amount=-800000
fv=0(the balance after all month payments is zero)
=pmt(5.25% /12,360,-800000,0)=$4,417.63
Number of month payments already made=18.5*12=222
Number of monthly payments outstanding=360-222=138
The balance of the mortgage now is the present of remaining mortgage payments
=-pv(rate,nper,pmt,fv)
rate=5.25% /12
nper=138
pmt=4417.63
fv=0
=-pv(5.25% /12,138,4417.63,0)
pv=$456,931
Cash balance=cash proceeds from sale of house-outstanding mortgage balance
Cash balance=$1,000,000-$456,931=$543,069
