You would like to buy a house that costs $350,000.
Question # 00666888
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Updated on: 03/31/2018 04:25 PM Due on: 03/31/2018
You would like to buy a house that costs $350,000. You have $50,000 in cash to put down on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30 year mortgage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $22,970 per year. The bank allows for 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 ballloon payment will be in addition to the 30th payment. Round to the nearest dollar.
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Solution: you would like to buy a house that costs$350,000. you