Question

In: Finance

You are looking for a $312,598 mortgage to buy a house. The mortgage has a 7...

You are looking for a $312,598 mortgage to buy a house. The mortgage has a 7 year term with a 22 year amortization. The rate on the mortgage is 2.75% APR with monthly compounding and monthly payments.

What is the balloon payment on the mortgage?

Round your answer to 2 decimal places. (For example 2.437 = 2.44)

Solutions

Expert Solution

Loan amount

$312,598

Rate of interest

2.75% with monthly compounding

Periodic Interest rate (2.75%/12) (r)

0.23%

Loan tenor

7 years = 84 months

Amortization

22 years = 264 months

Annuity factor can be calculated using below formula:

Annuity factor = (1/r)*{1-(1/ (1+r)t)}

Where, r = periodic interest rate

t = total number of payments

Monthly loan payment = Loan amount / Annuity factor

Monthly Payment= $312598 / (1/0.23%)*{1-(1/ (1+0.23%)264)}

Monthly Payment for amortization of 22 years = $1579.48

Loan tenor = 7 years = 84 months

Balloon payment on mortgage (principal balance at the end of 84th payment) = $232748.66

Amortization Schedule is as below:

Number of pay out
(t)		 Balance at beginning of payment
(A)		 Interest
(I = A*r%)		 Monthly payment
(M)		 Amortisation of loan
(B) = (M)-(I)		 Balance at end of payment
(C) = (A) -(B)
1 312598.00 716.37 1579.48 863.11 311734.89
2 311734.89 714.39 1579.48 865.09 310869.80
3 310869.80 712.41 1579.48 867.07 310002.72
4 310002.72 710.42 1579.48 869.06 309133.66
5 309133.66 708.43 1579.48 871.05 308262.61
6 308262.61 706.44 1579.48 873.05 307389.57
7 307389.57 704.43 1579.48 875.05 306514.52
8 306514.52 702.43 1579.48 877.05 305637.46
9 305637.46 700.42 1579.48 879.06 304758.40
10 304758.40 698.40 1579.48 881.08 303877.32
11 303877.32 696.39 1579.48 883.10 302994.22
12 302994.22 694.36 1579.48 885.12 302109.10
13 302109.10 692.33 1579.48 887.15 301221.95
14 301221.95 690.30 1579.48 889.18 300332.77
15 300332.77 688.26 1579.48 891.22 299441.55
16 299441.55 686.22 1579.48 893.26 298548.29
17 298548.29 684.17 1579.48 895.31 297652.98
18 297652.98 682.12 1579.48 897.36 296755.62
19 296755.62 680.06 1579.48 899.42 295856.20
20 295856.20 678.00 1579.48 901.48 294954.72
21 294954.72 675.94 1579.48 903.54 294051.18
22 294051.18 673.87 1579.48 905.62 293145.56
23 293145.56 671.79 1579.48 907.69 292237.87
24 292237.87 669.71 1579.48 909.77 291328.10
25 291328.10 667.63 1579.48 911.86 290416.24
26 290416.24 665.54 1579.48 913.95 289502.30
27 289502.30 663.44 1579.48 916.04 288586.26
28 288586.26 661.34 1579.48 918.14 287668.12
29 287668.12 659.24 1579.48 920.24 286747.87
30 286747.87 657.13 1579.48 922.35 285825.52
31 285825.52 655.02 1579.48 924.47 284901.06
32 284901.06 652.90 1579.48 926.58 283974.47
33 283974.47 650.77 1579.48 928.71 283045.76
34 283045.76 648.65 1579.48 930.84 282114.93
35 282114.93 646.51 1579.48 932.97 281181.96
36 281181.96 644.38 1579.48 935.11 280246.85
37 280246.85 642.23 1579.48 937.25 279309.60
38 279309.60 640.08 1579.48 939.40 278370.20
39 278370.20 637.93 1579.48 941.55 277428.65
40 277428.65 635.77 1579.48 943.71 276484.94
41 276484.94 633.61 1579.48 945.87 275539.07
42 275539.07 631.44 1579.48 948.04 274591.03
43 274591.03 629.27 1579.48 950.21 273640.82
44 273640.82 627.09 1579.48 952.39 272688.43
45 272688.43 624.91 1579.48 954.57 271733.86
46 271733.86 622.72 1579.48 956.76 270777.10
47 270777.10 620.53 1579.48 958.95 269818.15
48 269818.15 618.33 1579.48 961.15 268857.00
49 268857.00 616.13 1579.48 963.35 267893.65
50 267893.65 613.92 1579.48 965.56 266928.09
51 266928.09 611.71 1579.48 967.77 265960.31
52 265960.31 609.49 1579.48 969.99 264990.32
53 264990.32 607.27 1579.48 972.21 264018.11
54 264018.11 605.04 1579.48 974.44 263043.67
55 263043.67 602.81 1579.48 976.67 262066.99
56 262066.99 600.57 1579.48 978.91 261088.08
57 261088.08 598.33 1579.48 981.16 260106.93
58 260106.93 596.08 1579.48 983.40 259123.52
59 259123.52 593.82 1579.48 985.66 258137.86
60 258137.86 591.57 1579.48 987.92 257149.95
61 257149.95 589.30 1579.48 990.18 256159.77
62 256159.77 587.03 1579.48 992.45 255167.32
63 255167.32 584.76 1579.48 994.72 254172.59
64 254172.59 582.48 1579.48 997.00 253175.59
65 253175.59 580.19 1579.48 999.29 252176.30
66 252176.30 577.90 1579.48 1001.58 251174.72
67 251174.72 575.61 1579.48 1003.87 250170.85
68 250170.85 573.31 1579.48 1006.17 249164.67
69 249164.67 571.00 1579.48 1008.48 248156.19
70 248156.19 568.69 1579.48 1010.79 247145.40
71 247145.40 566.37 1579.48 1013.11 246132.29
72 246132.29 564.05 1579.48 1015.43 245116.86
73 245116.86 561.73 1579.48 1017.76 244099.10
74 244099.10 559.39 1579.48 1020.09 243079.02
75 243079.02 557.06 1579.48 1022.43 242056.59
76 242056.59 554.71 1579.48 1024.77 241031.82
77 241031.82 552.36 1579.48 1027.12 240004.70
78 240004.70 550.01 1579.48 1029.47 238975.23
79 238975.23 547.65 1579.48 1031.83 237943.40
80 237943.40 545.29 1579.48 1034.20 236909.20
81 236909.20 542.92 1579.48 1036.57 235872.64
82 235872.64 540.54 1579.48 1038.94 234833.69
83 234833.69 538.16 1579.48 1041.32 233792.37
84 233792.37 535.77 1579.48 1043.71 232748.66
85 232748.66 533.38 1579.48 1046.10 231702.56
86 231702.56 530.99 1579.48 1048.50 230654.07
87 230654.07 528.58 1579.48 1050.90 229603.16
88 229603.16 526.17 1579.48 1053.31 228549.86
89 228549.86 523.76 1579.48 1055.72 227494.13
90 227494.13 521.34 1579.48 1058.14 226435.99
91 226435.99 518.92 1579.48 1060.57 225375.42
92 225375.42 516.49 1579.48 1063.00 224312.43
93 224312.43 514.05 1579.48 1065.43 223246.99
94 223246.99 511.61 1579.48 1067.88 222179.12
95 222179.12 509.16 1579.48 1070.32 221108.80
96 221108.80 506.71 1579.48 1072.78 220036.02
97 220036.02 504.25 1579.48 1075.23 218960.79
98 218960.79 501.79 1579.48 1077.70 217883.09
99 217883.09 499.32 1579.48 1080.17 216802.92
100 216802.92 496.84 1579.48 1082.64 215720.28
101 215720.28 494.36 1579.48 1085.12 214635.16
102 214635.16 491.87 1579.48 1087.61 213547.55
103 213547.55 489.38 1579.48 1090.10 212457.44
104 212457.44 486.88 1579.48 1092.60 211364.84
105 211364.84 484.38 1579.48 1095.11 210269.74
106 210269.74 481.87 1579.48 1097.61 209172.12
107 209172.12 479.35 1579.48 1100.13 208071.99
108 208071.99 476.83 1579.48 1102.65 206969.34
109 206969.34 474.30 1579.48 1105.18 205864.16
110 205864.16 471.77 1579.48 1107.71 204756.45
111 204756.45 469.23 1579.48 1110.25 203646.20
112 203646.20 466.69 1579.48 1112.79 202533.41
113 202533.41 464.14 1579.48 1115.34 201418.06
114 201418.06 461.58 1579.48 1117.90 200300.16
115 200300.16 459.02 1579.48 1120.46 199179.70
116 199179.70 456.45 1579.48 1123.03 198056.67
117 198056.67 453.88 1579.48 1125.60 196931.07
118 196931.07 451.30 1579.48 1128.18 195802.89
119 195802.89 448.71 1579.48 1130.77 194672.12
120 194672.12 446.12 1579.48 1133.36 193538.76
121 193538.76 443.53 1579.48 1135.96 192402.81
122 192402.81 440.92 1579.48 1138.56 191264.25
123 191264.25 438.31 1579.48 1141.17 190123.08
124 190123.08 435.70 1579.48 1143.78 188979.29
125 188979.29 433.08 1579.48 1146.41 187832.89
126 187832.89 430.45 1579.48 1149.03 186683.85
127 186683.85 427.82 1579.48 1151.67 185532.19
128 185532.19 425.18 1579.48 1154.30 184377.88
129 184377.88 422.53 1579.48 1156.95 183220.93
130 183220.93 419.88 1579.48 1159.60 182061.33
131 182061.33 417.22 1579.48 1162.26 180899.07
132 180899.07 414.56 1579.48 1164.92 179734.15
133 179734.15 411.89 1579.48 1167.59 178566.56
134 178566.56 409.22 1579.48 1170.27 177396.29
135 177396.29 406.53 1579.48 1172.95 176223.34
136 176223.34 403.85 1579.48 1175.64 175047.70
137 175047.70 401.15 1579.48 1178.33 173869.37
138 173869.37 398.45 1579.48 1181.03 172688.34
139 172688.34 395.74 1579.48 1183.74 171504.60
140 171504.60 393.03 1579.48 1186.45 170318.15
141 170318.15 390.31 1579.48 1189.17 169128.98
142 169128.98 387.59 1579.48 1191.90 167937.08
143 167937.08 384.86 1579.48 1194.63 166742.46
144 166742.46 382.12 1579.48 1197.36 165545.09
145 165545.09 379.37 1579.48 1200.11 164344.98
146 164344.98 376.62 1579.48 1202.86 163142.13
147 163142.13 373.87 1579.48 1205.62 161936.51
148 161936.51 371.10 1579.48 1208.38 160728.13
149 160728.13 368.34 1579.48 1211.15 159516.98
150 159516.98 365.56 1579.48 1213.92 158303.06
151 158303.06 362.78 1579.48 1216.70 157086.36
152 157086.36 359.99 1579.48 1219.49 155866.86
153 155866.86 357.19 1579.48 1222.29 154644.58
154 154644.58 354.39 1579.48 1225.09 153419.49
155 153419.49 351.59 1579.48 1227.90 152191.59
156 152191.59 348.77 1579.48 1230.71 150960.88
157 150960.88 345.95 1579.48 1233.53 149727.35
158 149727.35 343.13 1579.48 1236.36 148490.99
159 148490.99 340.29 1579.48 1239.19 147251.80
160 147251.80 337.45 1579.48 1242.03 146009.77
161 146009.77 334.61 1579.48 1244.88 144764.89
162 144764.89 331.75 1579.48 1247.73 143517.16
163 143517.16 328.89 1579.48 1250.59 142266.57
164 142266.57 326.03 1579.48 1253.46 141013.12
165 141013.12 323.16 1579.48 1256.33 139756.79
166 139756.79 320.28 1579.48 1259.21 138497.58
167 138497.58 317.39 1579.48 1262.09 137235.49
168 137235.49 314.50 1579.48 1264.98 135970.51
169 135970.51 311.60 1579.48 1267.88 134702.62
170 134702.62 308.69 1579.48 1270.79 133431.83
171 133431.83 305.78 1579.48 1273.70 132158.13
172 132158.13 302.86 1579.48 1276.62 130881.51
173 130881.51 299.94 1579.48 1279.55 129601.96
174 129601.96 297.00 1579.48 1282.48 128319.49
175 128319.49 294.07 1579.48 1285.42 127034.07
176 127034.07 291.12 1579.48 1288.36 125745.71
177 125745.71 288.17 1579.48 1291.32 124454.39
178 124454.39 285.21 1579.48 1294.27 123160.12
179 123160.12 282.24 1579.48 1297.24 121862.87
180 121862.87 279.27 1579.48 1300.21 120562.66
181 120562.66 276.29 1579.48 1303.19 119259.47
182 119259.47 273.30 1579.48 1306.18 117953.29
183 117953.29 270.31 1579.48 1309.17 116644.11
184 116644.11 267.31 1579.48 1312.17 115331.94
185 115331.94 264.30 1579.48 1315.18 114016.76
186 114016.76 261.29 1579.48 1318.19 112698.57
187 112698.57 258.27 1579.48 1321.22 111377.35
188 111377.35 255.24 1579.48 1324.24 110053.11
189 110053.11 252.21 1579.48 1327.28 108725.83
190 108725.83 249.16 1579.48 1330.32 107395.51
191 107395.51 246.11 1579.48 1333.37 106062.14
192 106062.14 243.06 1579.48 1336.42 104725.72
193 104725.72 240.00 1579.48 1339.49 103386.23
194 103386.23 236.93 1579.48 1342.56 102043.68
195 102043.68 233.85 1579.48 1345.63 100698.04
196 100698.04 230.77 1579.48 1348.72 99349.33
197 99349.33 227.68 1579.48 1351.81 97997.52
198 97997.52 224.58 1579.48 1354.91 96642.62
199 96642.62 221.47 1579.48 1358.01 95284.61
200 95284.61 218.36 1579.48 1361.12 93923.48
201 93923.48 215.24 1579.48 1364.24 92559.24
202 92559.24 212.11 1579.48 1367.37 91191.87
203 91191.87 208.98 1579.48 1370.50 89821.37
204 89821.37 205.84 1579.48 1373.64 88447.73
205 88447.73 202.69 1579.48 1376.79 87070.94
206 87070.94 199.54 1579.48 1379.95 85691.00
207 85691.00 196.38 1579.48 1383.11 84307.89
208 84307.89 193.21 1579.48 1386.28 82921.61
209 82921.61 190.03 1579.48 1389.45 81532.16
210 81532.16 186.84 1579.48 1392.64 80139.52
211 80139.52 183.65 1579.48 1395.83 78743.69
212 78743.69 180.45 1579.48 1399.03 77344.66
213 77344.66 177.25 1579.48 1402.23 75942.42
214 75942.42 174.03 1579.48 1405.45 74536.98
215 74536.98 170.81 1579.48 1408.67 73128.31
216 73128.31 167.59 1579.48 1411.90 71716.41
217 71716.41 164.35 1579.48 1415.13 70301.28
218 70301.28 161.11 1579.48 1418.38 68882.90
219 68882.90 157.86 1579.48 1421.63 67461.28
220 67461.28 154.60 1579.48 1424.88 66036.39
221 66036.39 151.33 1579.48 1428.15 64608.24
222 64608.24 148.06 1579.48 1431.42 63176.82
223 63176.82 144.78 1579.48 1434.70 61742.12
224 61742.12 141.49 1579.48 1437.99 60304.13
225 60304.13 138.20 1579.48 1441.29 58862.84
226 58862.84 134.89 1579.48 1444.59 57418.25
227 57418.25 131.58 1579.48 1447.90 55970.35
228 55970.35 128.27 1579.48 1451.22 54519.14
229 54519.14 124.94 1579.48 1454.54 53064.59
230 53064.59 121.61 1579.48 1457.88 51606.72
231 51606.72 118.27 1579.48 1461.22 50145.50
232 50145.50 114.92 1579.48 1464.57 48680.93
233 48680.93 111.56 1579.48 1467.92 47213.01
234 47213.01 108.20 1579.48 1471.29 45741.72
235 45741.72 104.82 1579.48 1474.66 44267.07
236 44267.07 101.45 1579.48 1478.04 42789.03
237 42789.03 98.06 1579.48 1481.42 41307.60
238 41307.60 94.66 1579.48 1484.82 39822.79
239 39822.79 91.26 1579.48 1488.22 38334.56
240 38334.56 87.85 1579.48 1491.63 36842.93
241 36842.93 84.43 1579.48 1495.05 35347.88
242 35347.88 81.01 1579.48 1498.48 33849.40
243 33849.40 77.57 1579.48 1501.91 32347.49
244 32347.49 74.13 1579.48 1505.35 30842.14
245 30842.14 70.68 1579.48 1508.80 29333.33
246 29333.33 67.22 1579.48 1512.26 27821.07
247 27821.07 63.76 1579.48 1515.73 26305.35
248 26305.35 60.28 1579.48 1519.20 24786.15
249 24786.15 56.80 1579.48 1522.68 23263.47
250 23263.47 53.31 1579.48 1526.17 21737.30
251 21737.30 49.81 1579.48 1529.67 20207.63
252 20207.63 46.31 1579.48 1533.17 18674.45
253 18674.45 42.80 1579.48 1536.69 17137.77
254 17137.77 39.27 1579.48 1540.21 15597.56
255 15597.56 35.74 1579.48 1543.74 14053.82
256 14053.82 32.21 1579.48 1547.28 12506.54
257 12506.54 28.66 1579.48 1550.82 10955.72
258 10955.72 25.11 1579.48 1554.38 9401.35
259 9401.35 21.54 1579.48 1557.94 7843.41
260 7843.41 17.97 1579.48 1561.51 6281.90
261 6281.90 14.40 1579.48 1565.09 4716.81
262 4716.81 10.81 1579.48 1568.67 3148.14
263 3148.14 7.21 1579.48 1572.27 1575.87
264 1575.87 3.61 1579.48 1575.87 0.00

jeff jeffy answered 1 year ago
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