An investigator obtains a balloon mortgage with the terms shown below:
$420,000
25/6 balloon
6.2% annual rate
What is the monthly payment on this mortgage?
$6,195.000
$2,757.64
$7,000.33
$2,572.37

Question

An investigator obtains a balloon mortgage with the terms shown below:
$420,000
25/6 balloon
6.2% annual rate
What is the monthly payment on this mortgage?
$6,195.000
$2,757.64
$7,000.33
$2,572.37

anonymous · Answer

*investor. Not investigator.

amistre64 · Answer

the same payment as a 25 year fixed loan of the same rate

amistre64 · Answer

all a balloon does is say you have 6 years to save up the remaining balance.

anonymous · Answer

So it would be choice B? Because that's what I'm getting.

amistre64 · Answer

let me check with my own formula ... Bk^n(1-k)/(1-k^n) 420000k^(25*12)(1-k)/(1-k^(25*12)), k=1+.062/12 http://www.wolframalpha.com/input/?i=420000k%5E%2825*12%29%281-k%29%2F%281-k%5E%2825*12%29%29%2C+k%3D1%2B.062%2F12 yeah, 2757.64

amistre64 · Answer

now we can use that to balance out the loan after 6 years if we need to find the balloon payment