At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
just help me set up the problem adn ill try to figure out the answer
Okay, I'm not sure what a 30/11 balloon means — is that 30 year loan, but balloon due after 11 years?
Ah, 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*12-1 = 131 payments. Then total up the principal paid in those payments along with the remaining balance.
can u set it up for me in a formula?
in an equation?
Sorry, 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...
do u have i guess for this question?
what are the choices, we can see if I figured it out correctly :-)
okay ill poest em A:$750,869.29
you got it?
ah, 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!
you 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...
Ah, 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.