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You want to buy a house that costs $ 1 0 0 , 0 0 0 . You have $ 1 0 , 0 0
You want to buy a house that costs $ You have $ for a down payment, but your credit is such that mortgage companies will not lend you the required $ However,
the realtor persuades the seller to take a $ mortgage called a seller takeback mortgage at a rate of provided the loan is paid off in full in years. You expect to inherit
$ in years, but right now all you have is $ and you can afford to make payments of no more than $ per year given your salary. The loan would call for monthly
payments, but assume endofyear annual payments to simplify things.
a If the loan was amortized over years, howlarge would each annual payment be Do not round intermediate calculations. Round your answer to the nearest cent.
$
Could you afford those payments?
b If the loan was amortized over years, what would each payment be Do not round intermediate calculations. Round your answer to the nearest cent.
$
Could you afford those payments?
c To satisfy the seller, the year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment
plus the remaining balance on the loan. What would the loan balance be at the end of Year and what would the balloon payment be Do not round intermediate calculations.
Round your answers to the nearest cent.
Loan balance: $
Balloon payment: $
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