Question

Order these loans from highest monthly payment to lowest monthly payment. (Enter 1 as your answer to designate loan with highest payment, 2 as loan with second highest payment, and so on up to 5 to designate loan with lowest payment.) Each of the following loans is for $300,000 and is a fixed rate mortgage with a 3.5% interest rate. Assume 30 years.

Balloon payment of $500,000 is due at maturity

Balloon payment of $250,000 is due at maturity

The loan is fully repaid at maturity

Interest-only payments for the duration of the loan

Balloon payment of $100,000 is due at maturity

Answer 1

Hello Sir/ Mam

Present Value of Loan				$300,000
Interest Rate				3.50%
Term of loan				30 years
Loan #	Balloon Payment	Monthly payment	Formula Used	RANKS
1	500000	$560.24	=PMT(3.5%/12,30*12,-300000,500000,0)	5
2	250000	$953.69	=PMT(3.5%/12,30*12,-300000,250000,0)	3
3	0	$1,347.13	=PMT(3.5%/12,30*12,-300000,0,0)	1
4	300000	$875.00	=PMT(3.5%/12,30*12,-300000,300000,0)	4
5	100000	$1,189.76	=PMT(3.5%/12,30*12,-300000,100000,0)	2

I hope this solves your doubt.

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