You need a 25-year, fixed-rate mortgage to buy a new home for $230,000. Your mor
ID: 2660461 • Letter: Y
Question
You need a 25-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 8 percent APR for this loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. This balloon payment will have to be in the amount of $ for you to keep your monthly payments at $950. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))
You need a 25-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 8 percent APR for this loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. This balloon payment will have to be in the amount of $ for you to keep your monthly payments at $950. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
You need a 25-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 8 percent APR for this loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. This balloon payment will have to be in the amount of $ $ 784,743.60 for you to keep your monthly payments at $950. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))
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