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You would like to buy a house that costs $ 350 comma 000. You have $ 50 comma 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 7 % per year. You can afford to pay only $ 23 comma 690 per year. The bank agrees to allow you to pay this amount each​ year, yet still borrow $ 300 comma 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 :

jepessoa

Answer:

$45,900

Explanation:

I prepared an amortization schedule to show the 30 annual payments:

  • principal = $300,000
  • payment = $23,690
  • interest = 7%

At the end of the mortgage (in 30 years), the remaining balance of the debt will be $45,900, so the balloon payment must equal that amount to repay the debt completely.

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