Type your que Audrey Sanborn has just arranged to purchase a $590,000 vacation h

Question

Type your que

Audrey Sanborn has just arranged to purchase a $590,000 vacation home in the Bahamas with a 25 <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

percent down payment. The mortgage has a 6.5 percent stated annual interest rate, compounded

monthly, and calls for equal monthly payments over the next 30 years. Her first payment will be due one

month from now. However, the mortgage has an eight-year balloon payment, meaning that the balance

of the loan must be paid off at the end of Year 8. There are no other costs or finance charges. How much

will Audrey

Explanation / Answer

Home cost 590,000, We need to find Ballon payment at end of 8 yrs.
So 25% down paymet = 25%*590,000 = 147,500
SO Loan = Cost - DOwn Pmt = 442,500 = PV
Rate= 6.5% monthly = 6.5%/12
Term = 30 Yrs*12 = 360 period = nper
So MonthlyPymt = PMT(rate,nper,pv,fv) = PMT(6.1%/12,360,440000,0) = $2796.90

Ballon pymt = 8Yrs = 8*12 = 96 periods = nper
Ballon Pymt at Y8 = FV(Rate,nper,PMT,PV)
= FV(6.5%/12,96,-2796.9,442500)
= $(392,305.92)

i hope this helps... plz feel free to ask any doubt,,,. thank you.. plz rate me high.. :)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.