Question
Shannon finances $189,000 with a 20/7 balloon mortgage at 6.25%. How much will she pay for principal and interest over the life of the loan?
Answers
Reiny
Not totally familiar with US mortgage laws, since they differ slightly from my Canadian laws, but I'll take a shot
we need the monthly payment over a 20 year period:
i = .0625/12 = .00520833... ( I store that to keep accuracy)
n = 20(12) = 240
paym( 1 - 1.00520833..^-240)/.005208333 ... = 189000
I got paym = $1381.45
so now we need the balance after 7 years
outstanding balance
= 189000(1.005208333..)^84 - 1381.45(1.005208333^84 - 1)/.00520833..
= $147,291.59
see what you can do with that.
we need the monthly payment over a 20 year period:
i = .0625/12 = .00520833... ( I store that to keep accuracy)
n = 20(12) = 240
paym( 1 - 1.00520833..^-240)/.005208333 ... = 189000
I got paym = $1381.45
so now we need the balance after 7 years
outstanding balance
= 189000(1.005208333..)^84 - 1381.45(1.005208333^84 - 1)/.00520833..
= $147,291.59
see what you can do with that.