You need a 25-year, fixed-rate mortgage to buy a new home for $180,000. Your mortgage bank will lend you the money at a 8.6 percent APR for this 300-month loan. However, you can afford monthly payments of only $850, 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 $850?

Multiple Choice

A. $667,315.11

B. $641,649.14

C. $622,399.67

D. $54,856.38

E. $75,317.25