The main formula for computing it, is P=R[1-(1+i)^-n)] / i P the present value of annuity = $296,000 15/5 balloon mortgage, <span> 15 is the number of years during which the initial interest rate applies 6.75%=6.75/100=0.0675 and i= 0.0675/12 n=12*15=180 months </span>(1+i)^-n= (1+0.0675/12)^-180=0.364 1-(1+i)^-n / 0.0675/12 =1-0.364/0.0675/12=0.63/0.0675/12=112 $296,000=R x 112, finally we found R= $296,000 /112=$2642.8<span>
Because in the money market the money can be withdrawn in any moment buy in the certiicates of deposit there is a maturity date, that is when money can be withdrawn.
