Question
You need a 20-year, fixed-rate mortgage to buy a new house for $230,000. Your mortgage bank will lend you the money at a 8.6% APR
| You need a 20-year, fixed-rate mortgage to buy a new house for $230,000. Your mortgage bank will lend you the money at a 8.6% APR for this 240-month loan. Although, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. |
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| How large will this balloon payment have to be for you to keep your monthly payments at $950? |
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$673,397.26
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$121,324.59
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$700,333.15
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$653,195.34
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$104,640.23
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
