Question
You need a 30 year fixed rate mortgage to buy a new home for 70,00,000 INR. Your mortgage bank will lend you money at a
You need a 30 year fixed rate mortgage to buy a new home for 70,00,000 INR. Your mortgage bank will lend you money at a 12% APR compounded monthly for 360 months loan. However you can only afford monthly payments of 50,000 INR, so you offer to pay off any remaining loan balance at the end of the second month 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 50,000 INR ?
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Public Finance
Authors: Harvey S Rosen
7th Edition
0072876484, 978-0072876482
