Question

In: Accounting

You would like to buy a house that costs $ 350,000. You have $ 50,000 in...

You would like to buy a house that costs

$ 350,000. You have $ 50,000 in cash that you can put down on the​ house, but you need to borrow the rest of the purchase price. The bank is offering you a​ 30-year mortgage that requires annual payments and has an interest rate of 8 % per year. You can afford to pay only $ 25,580 per year. The bank agrees to allow you to pay this amount each​ year, yet still borrow $300,000.

At the end of the mortgage​ (in 30​ years), you must make a balloon​ payment; that​ is, you must repay the remaining balance on the mortgage. How much will be this balloon​ payment?

​Hint: The balloon payment will be in addition to the 30th payment.

The balloon payment is $__ ​(Round to the nearest​ dollar.)

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Expert Solution

ekkarill92 answered 1 year ago
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