Which situation is a true statement about payment options?
2 answers:
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Loan amount, P = 225000
interest = 5.5%/12 per month
Monthly payment, A = 1000
At the end of 30 years,
Future value of loan (with zero repayment)
F1=225000*(1+.055/12)^(30*12)
=1167162.264
Future value of repayment, A=1000 per month
F2=
=
=913611.893
Therefore balloon payment
= F1-F2
=1167162.264-913611.893
=253550.37 (to the nearest cent)
interest = 5.5%/12 per month
Monthly payment, A = 1000
At the end of 30 years,
Future value of loan (with zero repayment)
F1=225000*(1+.055/12)^(30*12)
=1167162.264
Future value of repayment, A=1000 per month
F2=
=
=913611.893
Therefore balloon payment
= F1-F2
=1167162.264-913611.893
=253550.37 (to the nearest cent)