Problem
Mr. and Mrs. Smith, who both work for a national retail chain, purchased a house with a price of $400,000. They paid a down payment of $40,000 using their savings and took a 30-year loan from the local bank at an interest rate of 9% per year. What is their monthly payment? After living five years in this house, they were transferred by their employer to another division in a different state, and they wanted to sell the house.
a. How much of the principal is left at the end of the fifth year?
b. If their MARR is 10%, what should be their minimum asking price for the house?