How much will this balloon payment be

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Reference no: EM132015167

Renfro Rentals has issued bonds that have a 8% coupon rate, payable semiannually. The bonds mature in 19 years, have a face value of $1,000, and a yield to maturity of 10%. What is the price of the bonds? Round your answer to the nearest cent.

2. You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 10 % per year. You can afford to pay only $31,190 per year. The bank agrees to allow you to pay this amount each? year, yet still borrow $300,000. At the end of the mortgage? (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage.

a. The PV of the annuity is $___ (Round to the nearest dollar.)

b. How much will this balloon payment be?

Reference no: EM132015167

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