Question

You need a 20-year, fixed-rate mortgage to buy a new home for $180,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this 240-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. Required: How large will this balloon payment have to be for you to keep your monthly payments at $950? rev: 09_17_2012 $207,848.02 $199,853.87 $193,858.25 $53,581.46 $38,924.29

Answer #1

You need a 20-year, fixed-rate mortgage to buy a new home for
$220,000. Your mortgage bank will lend you the money at a 6.6
percent APR for this 240-month loan. However, you can afford
monthly payments of only $950, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
How large will this balloon payment have to be for you to keep
your monthly payments at...

You need a 20-year, fixed-rate mortgage to buy a new home for
$190,000. Your mortgage bank will lend you the money at a 8.6
percent APR for this 240-month loan. However, you can afford
monthly payments of only $950, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
How large will this balloon payment have to be for you to keep
your monthly payments at...

You need a 20-year, fixed-rate mortgage to buy a new home for
$230,000. Your mortgage bank will lend you the money at a 8.1
percent APR for this 240-month loan. However, you can afford
monthly payments of only $850, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
Required:
How large will this balloon payment have to be for you to keep
your monthly payments...

You need a 15-year, fixed-rate mortgage to buy a new home for
$220,000. Your mortgage bank will lend you the money at a 7.6
percent APR for this 180-month loan. However, you can afford
monthly payments of only $950, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
How large will this balloon payment have to be for you to keep
your monthly payments at...

You need a 25-year, fixed-rate mortgage to buy a new home for
$190,000. Your mortgage bank will lend you the money at a 9.1
percent APR for this 300-month loan. However, you can afford
monthly payments of only $800, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
How large will this balloon payment have to be for you to keep
your monthly payments at...

You need a 25-year, fixed-rate mortgage to buy a new home for
$240,000. Your mortgage bank will lend you the money at a 6.1
percent APR for this 300-month loan. However, you can afford
monthly payments of only $800, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
Required: How large will this balloon payment have to be for you
to keep your monthly payments...

You need a 25-year, fixed-rate mortgage to buy a new home for
$250,000. Your mortgage bank will lend you the money at a 7.1
percent APR for this 300-month loan. However, you can afford
monthly payments of only $900, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
Required:
How large will this balloon payment have to be for you to keep
your monthly payments...

You need a 30-year, fixed-rate mortgage to buy a new home for
$240,000. Your mortgage bank will lend you the money at a 9.1
percent APR for this 360-month loan. However, you can afford
monthly payments of only $950, so you offer to pay off any
remaining loan balance at the end of the loan in the form of a
single balloon payment.
Required:
How large will this balloon payment have to be for you to keep
your monthly payments...

You need a 30-year, fixed-rate mortgage to buy a new home for
$265,000. Your mortgage bank will lend you the money at an APR of
5.6 percent for this 360-month loan. However, you can only afford
monthly payments of $1,050, so you offer to pay off any remaining
loan balance at the end of the loan in the form of a single balloon
payment.
How large will this balloon payment have to be for you to keep
your monthly...

You need a 30-year,
fixed-rate mortgage to buy a new home for $230,000. Your mortgage
bank will lend you the money at a 7.6 percent APR for this
360-month loan. However, you can afford monthly payments of only
$800, so you offer to pay off any remaining loan balance at the end
of the loan in the form of a single balloon payment.
How large will this
balloon payment have to be for you to keep your monthly payments at...

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