Question

Maya obtains a $423,000 30/10 balloon mortgage with a rate of 5.65%. What will her monthly payments be? (2 points)

Answer 1

Her monthly payment is approximately $4,611.65

Explanation:

The monthly payment on the loan is given by the following formula;

`A = P \cdot (r\cdot (1 + r)^n)/((1 + r)^n - 1)`

A = The monthly payment

P = The principal amount = $423,000

r = 5.65%

The number of years = 10 years

`A = 423,000 \cdot ((0.0565)/(12) \cdot \left (1 + (0.0565)/(12) \right )^(180))/(\left (1 + (0.0565)/(12) \right )^(180) - 1) \approx 4611.65`

Her monthly payment, A ≈ $4,611.65