You are looking to purchase a Tesla Model S luxury sedan. The price of the car is

Question:

You are looking to purchase a Tesla Model S luxury sedan. The price of the car is $77,520. However, you negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,250 per month for the following five years, with a balloon payment at the end to cover the remaining principal on the loan. The APR on the loan with monthly is 5 percent. What will be the amount of the balloon payment six years from now?
Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...