You would like to buy a house that costs $ 350 comma 000$350,000. You have $ 50 comma 000$50,000 in cash that you can put down on the​ house, but you need to borrow the rest of the purchase price. The bank is offering a​ 30-year mortgage that requires annual payments and has an interest rate of 8 %8% per year. You can afford to pay only $ 25 comma 580$25,580 per year. The bank agrees to allow you to pay this amount each​ year, yet still borrow $ 300 comma 000$300,000. At the end of the mortgage​ (in 30​ years), you must make a balloon​ payment; that​ is, you must repay the remaining balance on the mortgage. How much will this balloon payment​ be?

Respuesta :

Answer:

$121,012.53

Explanation:

principal = $300,000

APR = 8%

n = 30 years

annual payment = $25,580

assuming that interest is compounded annually, then the annual payment should be = $300,000 / 11.25778  (PV annuity factor, 8%, 30 periods) = $26,648.24

I prepared an amortization schedule to calculate the balloon payment: $121,012.53