Final answer:
To keep the monthly payments at $850, the balloon payment would need to cover the remaining loan balance. Calculate the remaining loan balance after making the monthly payments for the desired period of time and subtract it from the original loan amount to determine the balloon payment.
Step-by-step explanation:
To keep the monthly payments at $850, the balloon payment would need to cover the remaining loan balance. Here's how you can calculate it:
- Calculate the remaining loan balance after making the monthly payments for the desired period of time.
- Subtract the remaining loan balance from the original loan amount to determine the balloon payment.
For example, let's say you have a $1,000,000 loan with $850 monthly payments and want to calculate the balloon payment after 30 years. Assuming there is no interest, the remaining loan balance after 360 payments of $850 would be $308,000. The balloon payment would then be $1,000,000 - $308,000 = $692,000.