Question

Financial Algebra Help!

Ella obtains a $750,000 balloon mortgage for an investment property. The mortgage has terms of 15/3 at an interest rate of 5.5%. The monthly payment is $6,128.13. How much is the remaining balance after 3 years rounded to the nearest dollar?

$529,387

$644,949

$704,391

$600,000

Answer 1

hmm, they give payment amount, they give fixed rate time period ... is your 15/3 accurate? or is that spose to be 3/15? either way it soulnds off

Answer 2

lol, its right ... 3 years of paymetns then pay off the balance

Answer 3

so all we have to do is balance it out after 3 years ... also known as the balloon payment

Answer 4

what formula do you use to detemine the amount balance of a loan after so many years?

Answer 5

The monthly payment formula? (Sorry, openstudy didn't give me any notifications saying someone commented!)

Answer 6

they already give you monthly payments, so i dont think we need to determine the monthly payments as an account balance ....

Answer 7

lets use this:\[A_n=B_ok^n-P\frac{1-k^n}{1-k}\]
such that k is the compounding interest stuff

Answer 8

This formula always confuses me :l

Answer 9

lol, its more logical to me than the rest of the stuff they present in the text books

you have a balance that compounds, and a set of payments that reduces it by some geometric progression

Answer 10

Bo =750000

P = 6128.13

k = 1+.055/12

and its for n periods, ..3*12 = 36 periods

Answer 11

Okay just to make sure, k = 1.045 right?

Answer 12

1.004583....

Answer 13

My calculator says otherwise. I just tried it on a different one and got the same answer as before

Answer 14

http://www.wolframalpha.com/input/?i=750000k%5E%2836%29-6128.13%281-k%5E%2836%29%29%2F%281-k%29%2C+k%3D1%2B.055%2F12

Answer 15

5.5% = .055

1 + .055/12 = 1.00458333333

Answer 16

So the answer would be 644,949?

Answer 17

Oh! I was typing in 0.55 xD my bad!

Answer 18

you didnt move your decimal far enough .. 1 + 0.55/12 = 1.045833333

Answer 19

Yeah i just realized that

Answer 20

645k is correct .... assuming i have enough mtDew in my brain to work it properly ;)

Answer 21

lol Well thank you very much! I'm taking a practice exam and may need more help. Is it okay if I ask for your help again if I need it?

Answer 22

Apr, 2014 $3,437.50 $2,690.63 $747,309.37
May, 2014 $3,425.17 $2,702.96 $744,606.42
Jun, 2014 $3,412.78 $2,715.35 $741,891.07
Jul, 2014 $3,400.33 $2,727.79 $739,163.28
Aug, 2014 $3,387.83 $2,740.29 $736,422.98
Sep, 2014 $3,375.27 $2,752.85 $733,670.13
Oct, 2014 $3,362.65 $2,765.47 $730,904.66
Nov, 2014 $3,349.98 $2,778.15 $728,126.51
Dec, 2014 $3,337.25 $2,790.88 $725,335.63
Jan, 2015 $3,324.45 $2,803.67 $722,531.96
Feb, 2015 $3,311.60 $2,816.52 $719,715.44
Mar, 2015 $3,298.70 $2,829.43 $716,886.01

Apr, 2015 $3,285.73 $2,842.40 $714,043.61
May, 2015 $3,272.70 $2,855.43 $711,188.19
Jun, 2015 $3,259.61 $2,868.51 $708,319.67
Jul, 2015 $3,246.47 $2,881.66 $705,438.01
Aug, 2015 $3,233.26 $2,894.87 $702,543.14
Sep, 2015 $3,219.99 $2,908.14 $699,635.01
Oct, 2015 $3,206.66 $2,921.47 $696,713.54
Nov, 2015 $3,193.27 $2,934.86 $693,778.69
Dec, 2015 $3,179.82 $2,948.31 $690,830.38
Jan, 2016 $3,166.31 $2,961.82 $687,868.56
Feb, 2016 $3,152.73 $2,975.40 $684,893.16
Mar, 2016 $3,139.09 $2,989.03 $681,904.13
Apr, 2016 $3,125.39 $3,002.73 $678,901.40

May, 2016 $3,111.63 $3,016.49 $675,884.91
Jun, 2016 $3,097.81 $3,030.32 $672,854.59
Jul, 2016 $3,083.92 $3,044.21 $669,810.38
Aug, 2016 $3,069.96 $3,058.16 $666,752.21
Sep, 2016 $3,055.95 $3,072.18 $663,680.04
Oct, 2016 $3,041.87 $3,086.26 $660,593.78
Nov, 2016 $3,027.72 $3,100.40 $657,493.37
Dec, 2016 $3,013.51 $3,114.61 $654,378.76
Jan, 2017 $2,999.24 $3,128.89 $651,249.87
Feb, 2017 $2,984.90 $3,143.23 $648,106.64
Mar, 2017 $2,970.49 $3,157.64 $644,949.00
^^^^^^^

Apr, 2017 $2,956.02 $3,172.11 $641,776.89

Answer 23

http://www.amortization-calc.com/mortgage-calculator/

just to be sure ;)

Answer 24

if im around ... but if its about points, i havent a clue about them

Answer 25

lol Okay, thanks again