K4. 1A) Laura's company buys a property valued at $15,000,000 and finances the purchase with an 70% LTV loan. The bank offers a 25 year amortization schedule with 8.00% interest and monthly payments and requires a balloon repayment after 5 years. If Laura's company holds on to the mortgage at maturity, what will be their balloon payment at the end of the mortgage term? State your answer as a number rounded to the nearest cent

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.