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Miranda obtains a $296,000 15/5 balloon mortgage with a rate of 6.75%. What will her monthly payments be?

User Kkaefer
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1 Answer

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the main formula for computing it, is
P=R[1-(1+i)^-n)] / i
P the present value of annuity = $296,000
15/5 balloon mortgage, 15 is the number of years during which the initial interest rate applies
6.75%=6.75/100=0.0675 and i= 0.0675/12
n=12*15=180 months
(1+i)^-n= (1+0.0675/12)^-180=0.364
1-(1+i)^-n / 0.0675/12 =1-0.364/0.0675/12=0.63/0.0675/12=112
$296,000=R x 112, finally we found R= $296,000 /112=$2642.8

her monthly payments will be $2642.8
User Jasko
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