Definition: Calculate Pay Off Mortgage means to determine how much money you need to repay a mortgage payment after many years, based on the monthly interest rate and principal amount of the loan. Definition: - Calculate: to figure out or estimate how much you have to pay back by way of interest payments over time. - Pay off: to eliminate (the remaining part of) your debt with the help of cash flow or other means. Example: Let's say you're currently making $3,000 monthly in mortgage payments. If the interest rate is 5%, and the principal amount is $200,000, how much money will be left after many years? Calculate: You need to make an extra $67,500 per month in interest to pay off the entire mortgage at maturity. This means you'll have about $348,000 in cash flow from other sources by then. Pay off: You're able to eliminate your mortgage payments with the help of additional income streams like savings or investments. - Explanation: - 'Calculate': The process involves figuring out how much money a person needs to pay back after many years based on monthly interest rates and principal amounts. In this case, you need to figure out how much more money you'll have in your savings account each month than you owe, which is the principle amount of your mortgage. - 'Pay off': The goal here is to eliminate the remaining part of the mortgage with cash flow or other means. This includes any extra income that comes from sources like investments and savings accounts.
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