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anonymous
 one year ago
Joshua finances $512,300 with a 30/11 balloon mortgage at 4.7%. How much will he pay for principal and interest over the life of the loan?
anonymous
 one year ago
Joshua finances $512,300 with a 30/11 balloon mortgage at 4.7%. How much will he pay for principal and interest over the life of the loan?

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anonymous
 one year ago
Best ResponseYou've already chosen the best response.0@ganeshie8 @whpalmer4

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0just help me set up the problem adn ill try to figure out the answer

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1Okay, I'm not sure what a 30/11 balloon means — is that 30 year loan, but balloon due after 11 years?

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1Ah, I think that means the loan amortization is calculated as if a 30 year loan, but after 11 years the remaining balance is due in the final balloon payment. So, calculate an amortization table for a 30 year loan, 4.7% APR. Total up the interest paid in the first 11*121 = 131 payments. Then total up the principal paid in those payments along with the remaining balance.

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0can u set it up for me in a formula?

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1Sorry, I don't have a formula for you. There are online calculators which will do it for you, or you can use a spreadsheet, or maybe someone has a formula...

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0do u have i guess for this question?

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1what are the choices, we can see if I figured it out correctly :)

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0okay ill poest em A:$750,869.29

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1ah, yes, I did get one of those. made a mistake in my arithmetic the first time, though, so it didn't look like I did, had to redo it!

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1you can clearly rule out D, as you're going to pay $512,300 in principal and that only leaves 24,000 and change for interest, which is clearly too low for use of half a million for 11 years! C also seems safe to rule out, as a rule of thumb is that a 30 year mortgage costs you about as much in interest as principal, and we are skipping 19 years of interest by doing the balloon payment. to choose between A and B, though, you need to do the math, or be a lucky guesser...

whpalmer4
 one year ago
Best ResponseYou've already chosen the best response.1Ah, found a formula for you: http://www.financeformulas.net/Loan_Balloon_Balance.html You'll need to figure out the regular payment to use it, but you should know how to do that, I hope. If not, you should be able to find it at that site, or in your course materials.
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