Asked by Wawa
You need a 30-year, fixed-rate mortgage to buy a new home for $235,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 360-month loan. However, you can afford monthly payments of only $925, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $925?
Answers
Answered by
Reiny
I will assume that the rate is 5.35% per annum, compounded monthly, that is
i = .053/12 = .0041666..
let the balloon payment be x
925(1.0041666..^360 - 1)/.0041666... + x = 235,000(1.004166...)^360
solve for x
Tell me what you got.
If you get an answer of over $340,000 , don't be alarmed, it is correct.
This scenario is really unreasonable, the actual payments on this mortgage
should have been over $1300 per month, so this mortgage was beyond your
budget.
i = .053/12 = .0041666..
let the balloon payment be x
925(1.0041666..^360 - 1)/.0041666... + x = 235,000(1.004166...)^360
solve for x
Tell me what you got.
If you get an answer of over $340,000 , don't be alarmed, it is correct.
This scenario is really unreasonable, the actual payments on this mortgage
should have been over $1300 per month, so this mortgage was beyond your
budget.
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.