Question
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 7.6 percent
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 7.6 percent APR for this 300-month loan. However, 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.
Required:
How large will this balloon payment have to be for you to keep your monthly payments at $950?
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown, Sanford J. Leeds
11th Edition
1305262999, 1305262997, 035726164X, 978-1305262997
