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assume you have taken out a partially amortizing loan for $1,000,000 that has a term of 7 years, but amortizes over 20 years. calculate the balloon payment if the interest rate on this loan is 9%.
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assume you have taken out a partially amortizing loan for $1,000,000 that has a term of 7 years, but amortizes over 20 years. calculate the balloon payment if the interest rate on this loan is 9%.

User Hanushka Suren
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9 votes

Answer:

The balloon payment for this loan would be $581,213.92. This can be calculated by taking the original loan amount of $1,000,000, multiplied by the interest rate of 9%, then multiplied by the difference in the amortization period (20 years) and the loan term (7 years). This equals $540,000. Finally, add the original loan amount to the interest amount, resulting in $1,540,000. This is the total amount due at the end of the loan term, or the balloon payment.

Step-by-step explanation:

User Sean Zhao
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