Balloon Payments Amanda Rice has arranged to purchase a $775,000 vacation home in the Bahamas with a 20 percent down payment. The mortgage has a 4.9 APR com pounded monthly and calls for equal monthly payments over the next 30 years. Her first payment will be due one month from now. However, the mortgage has an eight-year balloon payment, meaning that the balance of the loan must be paid off at the end of Year 8. There were no other transaction costs or finance charges. How much will Aman da's balloon payment be in eight years?

Balloon Payments Amanda Rice has arranged to purchase a $775,000 vacation home in the Bahamas with a 20 percent down payment. The mortgage has a 4.9 APR com pounded monthly and calls for equal monthly payments over the next 30 years. Her first payment will be due one month from now. However, the mortgage has an eight-year balloon payment, meaning that the balance of the loan must be paid off at the end of Year 8. There were no other transaction costs or finance charges. How much will Aman da's balloon payment be in eight years?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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