Calculator Problem – 11/07/2011

There is a loan of $100,000 at 6% with a payment of $700 a month.  If the loan has a balloon provision at the end of eight years, how much will the balloon payment be?

(The answer will be posted with the new calculator problem in 2 weeks. Or if you can’t wait that long, you can go to http://www.facebook.com/pages/Gary-Johnston-Seminars/111368472221424 for the answer.)

Answer to 10/24/2011 problem:

(N=360,I=6,PV=80,000,FV=0)          PMT= $479.64
(N=360,I=4.25,PV=63,000,FV=0)     PMT = $309.92
Difference                                                               $169.72