Question

Please help!

Twyla and Tony have a 30/5 balloon mortgage for $389,900 with a rate of 4.85%. How much will they pay in interest over the life of the loan?

Answer 1

a balloon payment is the payment that will take care of the loan after 5 years.

the strategy is to determine the balance after 5 years of a 30 year fixed mortgage

Answer 2

add in the payments that they have made and subtract the initial loan amount

Answer 3

Ok now what

Answer 4

does the picture of the screen shot come up?

Answer 5

Yes but that isn't one of my answer choices

Answer 6

what are the choices?

Answer 7

$81,373.41
$92,2

Answer 8

$92,263.82

Answer 9

$107,536.50

Answer 10

$121,390.73

Answer 11

oy .....

im still getting an ending balance for a balloon payment of: 357271.65

with 5 payments of: 2057.47 ... or simply 10287.35 in payments over 5 years

357271.65
10287.35
----------
367559.00 for a total paid. subtracting the initial


389900
-367559
--------
22341 in interest

unless im not remembering what a balloon payment represents

Answer 12

"In some respects, a balloon loan looks very much like a 30-year fixed-rate mortgage. The payments are calculated in exactly the same way. ... the payment is the amount required to pay off the mortgage in full over 30 years ...after a specified period, generally 5 or 7 years, the outstanding balance (the "balloon") has to be repaid in full."

http://www.mtgprofessor.com/a%20-%20balloon%20loans/is_a_balloon_loan_better_than_an_arm.htm

Answer 13

Hmm I'm stumped

Answer 14

me too

Answer 15

it hit me while driving home yesterday .... i only added up 5 payments instead of 5 YEARS worth of payments

Answer 16

5 YEARS payments of amounts to 60 payments of 2057.47 each

2057.47
60
----------
123448.20

add in the balloon payment

357271.65
123448.20
----------
480719.85 , now subtract out the original loan
389900.
----------
90819.85

accounting for some rough estimations in that, id say the 92000 is the closest option

Answer 17

Ur awesome!!