You need a 20-year, fixed-rate mortgage to buy a new home for $210,000. Your mortgage bank will lend you the money at a 9.1 percent APR for this 240-month loan. However, you can afford monthly payments of only $900, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.

Required:

How large will this balloon payment have to be for you to keep your monthly payments at $900?

Multiple Choice

• $658,077.83

• $110,680.6

• $94,480.95

• $678,430.75

• $705,567.98