Answer:
$278.15×60= $16688.969
Step-by-step explanation:
Murphy has a 15/5 balloon mortgage plan therefore he would make constant payments monthly for five years and then pay the balance of the loan/balloon payment for the 10 years left in bulk
To calculate principal+interest on loan before balloon payment is due, we simply calculate Murphy's constant/monthly payments for the 15 year loan amortization and multiply by number of payments before balloon payment is due:
Formula for monthly payments
A= P×r×r(1+r)^n/(1+r)^n-1
Where A= monthly payments
P= mortgage loan value
r= interest rate on loan
n= number of payments = 15×12= 180 monthly payments
Substitute :
A= $113500×0.0495×0.0495(1+0.0495)^180/(1+0.0495)^180-1
A= $113500×0.0495×296.104/5980.90
A= $113500×0.0495×0.049508
A= $278.15
To calculate our principal and interest before balloon payment, we multiply by number of payments(5×12=60 payments) before due balloon payment
60×$278.15= $16688.969
