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Amortization schedule with a ballon payment You want to buy a house that cost$300,000. You have $30,000 for a down payment, but your credit is
Amortization schedule with a ballon payment
You want to buy a house that cost$300,000. You have $30,000 for a down payment, but your credit is such that mortgages company will not lend you the required $270,000. However, the realtor persuaded the seller to take a $270,000 mortgage at a rate of 7% provided the loan is paid off in full 3 years . You expect to inherit $300,000 in 3 years; but right now all u have is $30,000 and you can afford to make payments of no more than $24,000 per year given your salary .
A) if the loan amortized over 3 years, how large would each annual payment be? Round nearest cents
B) if the loan were amortized over 30 years, what would each payment be ? Round nearest cent
To satisfy the seller , the mortgage loan would be written as a ballon note, which mean that that the end of the third year, you would have to make the regular payments plus the remaining balance of the loan.
C) What would the loan balance be at the end of year 3? Round nearest cents
What would the ballon payment be ? Round to nearest cent
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