vould like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of gage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,690 per year. The bank agrees to allo D,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgager The balloon payment will be in addition to the 30th payment.
vould like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of gage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,690 per year. The bank agrees to allo D,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgager The balloon payment will be in addition to the 30th payment.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
Related questions
Question
![You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of the purchase price. The bank is offering you a 30-year
mortgage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,690 per year. The bank agrees to allow you to pay this amount each year, yet still borrow
$300,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will be this balloon payment?
Hint: The balloon payment will be in addition to the 30th payment.
Luctr
The balloon payment is $
(Round to the nearest dollar.)
FAFSA.
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O Time Remaining: 00:24:55
Submit test
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$
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Transcribed Image Text:You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of the purchase price. The bank is offering you a 30-year
mortgage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,690 per year. The bank agrees to allow you to pay this amount each year, yet still borrow
$300,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will be this balloon payment?
Hint: The balloon payment will be in addition to the 30th payment.
Luctr
The balloon payment is $
(Round to the nearest dollar.)
FAFSA.
ereen Shot
-12. 8.51 AM
Ereen Shot
-12.57.37 PM 2
creen Shot
12.9.00 PM 2021-
O Time Remaining: 00:24:55
Submit test
11
A O Ctv
DO
DII
F12
F11
F10
88
F9
FB
F7
F6
F5
F4
esc
F3
F2
F1
&
2#
$
%
9
@
7
8
4
1
2
P
R
T
Y
Q
W
E
tab
K
* 00
LO
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Balloon payment is one time payment made at the end of period to pay the remaining amount of the loan.
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