Question

Carson is accepted for a 20/10 balloon mortgage at 4.27%. If Carson finances $235,750, how much will his balloon payment be?

$142,623.08

$143,130.58

$148,713.09

$188,077.31

Answer 1

@dan815

Answer 2

Okay are you aware of what the 20/10 balloon mortgage means

Answer 3

No i'm not! It wasn't very clear in our lesson plan

Answer 4

Get convenient monthly payments and save money on interests: The 20/10 Mortgage payment is calculated on a 20-year term at a lower interest rate in comparison to the one offered by the 30 year fixed mortgage

Answer 5

Okay! So how would I calculate the problem?

Answer 6

I tried putting the numbers into a balloon mortgage calculator but it didnt match any of my answers.

Answer 7

okay gimme a sec, ill just look up a balloon payment example

Answer 8

http://prntscr.com/74kxeq

Answer 9

Thanks! But that result doesn't match any of my answer choices

Answer 10

Answer is 143,130.58

Answer 11

yeah that is the closest one but, check this out !
https://www.youtube.com/watch?v=Qt-CWv6HEII

Answer 12

oaky so the idea is simple,
what we are doing is basically we look at how the payments will normally be over 20 year ammortization then we look at how much money we would have at 10 years in that series, see the principal left at 10 years and tahtsa the balloon payment

Answer 13

Let me try to work this out now

Answer 14

so lets see what monthly payments will complete this total payment at 20 years with a 4.27% interest

Answer 15

P= principal ammount financed
m= monthly payments