For an 8.0% annual yield on a monthly mortgage:
- Monthly rate r=8%/12=0.6667%=0.0066667
- Term n=360
- Principal PV=100,000
First compute the monthly payment:
PMT=100,000⋅(1.0066667)360−10.0066667(1.0066667)360≈733.76
Then compute the balance after 2 payments:
B2=PV(1+r)2−PMT(r(1+r)2−1)
Substituting the values gives a remaining balance of approximately $99,865.
So the correct answer is B.
