An investor obtains a balloon mortgage with the terms shown below. Balloon Mortgage
$530,000
30/7 balloon
6.8% annual rate
What is the monthly payment on this mortgage?
a. 3,455.20 b. 3,678.58 c. 6,738.57 d. 7,947.40

9514 1404 393

  a.  $3,455.20

Step-by-step explanation:

The monthly payment is given by the amortization formula:

  A = P(r/12)/(1 -(1 +r/12)^(-12t))

for loan amount P at annual rate r for t years.

For this mortgage, we use P = $530,000, r = 0.068, t = 30.

  A = $530,000(0.068/12)/(1 -(1 +0.068/12)^(-360)) ≈ $3,455.20

The monthly payment is $3,455.20.

Additional comment

In 7 years, the balloon payment will be $481,559.91.

step-by-step explanation:

if you meant, "on the way from (3, 2) to (3, 14):

x does not change; y increases by 12.

ensure that you have copied down this problem correctly.   .

7

step-by-step explanation: