Answer:
$717,393.12
Step-by-step explanation:
The 30/6 balloon mortgage means that she would make monthly payments for the first six years, while the balance outstanding after 6 years is paid by making one large payment.
The 30 implies that monthly payment should be computed on the basis it is a 30-year mortgage.
Loan amount=monthly payment*(1-(1+r)^-n/r
loan amount=$549,000
monthly payment=the unknown
r=monthly interest rate=5.35%/12=0.004458333
n=number of monthly payments in 30 years=30*12=360
549000=monthly payment*(1-(1+0.004458333)^-360/0.004458333
549000=monthly payment*(1-0.201607475)/0.004458333
549000=monthly payment*0.798392525/0.004458333
monthly payment=549000*0.004458333/0.798392525=$ 3,065.69
Total monthly payments for6 years=$ 3,065.69*12*6=$220,729.68
The ballon payment is the present value of monthly payments for 24 years remaining
Financial calculator:
N=288(24*12)
PMT=3065,69(monthly payment)
I/Y=5.35/12(monthly interest rate)
FV=0(balance after payments is nil)
CPT PV=$496,663.41
Total payments=$496,663.41 +$220,729.68=$717,393.09
