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You need a 30-year, fixed-rate mortgage to buy a new home for $335,000. Your mortgage bank will lend you the money at an APR of 6.3 percent for this 360-month loan. However, you can afford monthly payments of only $1,750, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1,750? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

Answer:

Balloon payment  is $344311.23

Explanation:

Given data

buy  home = $335,000

APR r = 6.3 %

loan time n = 360 month

monthly payments = $1,750

to find out

how large Balloon payment

solution

we apply here formula that is

present value = principal ( 1 - (1 / (1+ r)^n / r

so put all value

present value = 1750 ( 1 - (1 / (1+ 0.063/12)^360 / 0.063/12

present value =  282726.48

so

of amount owe here is 335000 - 282726.48

amount owe = $52273.52

so that

balloon amount for 30 year

balloon amount = amount owe ( 1+r)^n

balloon amount =  52273.52 ( 1+0.063/12)^360

balloon amount is 344311.23

so Balloon payment  is $344311.23

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