Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You need a 35-year, fixed-rate mortgage to buy a new home for $245,000. Your mortgage bank will lend you the money at a 5.40 percent

You need a 35-year, fixed-rate mortgage to buy a new home for $245,000. Your mortgage bank will lend you the money at a 5.40 percent APR for this 420-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? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))


Balloon payment $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance Lessons From The Past And Effects On The Future

Authors: Miguel-Angel Galindo Martin

1st Edition

1629481491, 978-1629481494

More Books

Students also viewed these Finance questions

Question

1. Describe the factors that lead to productive conflict

Answered: 1 week ago