Fixed Rate - Example 3 |
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Fixed Rate - Example 3 |
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Fixed Rate - Example 3
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Fixed Rate - Example 3 |
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Fixed Rate - Example 3 |
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When the payment is insufficient to pay off the mortgage or loan principal in the
specified period, a sum of money accumulates - called a Balloon amount. This
amount is usually due in full at the end of the term or amortization period. A lease
can also have a Balloon amount. The buyout price often quoted for a car or piece
of equipment in a lease can be treated as a Balloon amount.
Fixed Rate - EXAMPLE 3 |
On January 10, 2011, Buildall Contractors arrange a construction loan for $750,000.00 at 12.25 percent annual interest. The payment schedule is such that $15,000.00 per month is to be paid for 10 months while the construction is taking place. The remaining amount is to be paid back in one lump sum. The first payment is due on February 10, 2011. |
Solve The final payment amount called the Balloon Payment.
Enter the data as illustrated in the following screen.
Press
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To pay off the loan, a final payment of $688,095.47 will be required. |
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