What is the size of the balloon payment

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Reference no: EM131813319

1)) Suppose that you take out a mortgage loan with the following characteristics: compounding period is monthly loan is for $150,000 APR = 8% life of loan for the purpose of calculating the mortgage payments is 30 years the loan requires a balloon payment of the balance of the principal owed at the end of year 5, i.e., the balance owed immediately after the 60th payment. What is the size of the balloon payment? Do not round at intermediate steps in your calculation.

2)) Suppose that you are age 25 today and plan on retiring at age 65. You determined that you need to have saved $602784 in real dollars by the time you retire. How much must you contribute (in real dollars) each year to your retirement account to achieve your goal? Assume the following: you make annual contributions; each contribution is the same amount in real dollars; the first contribution will be one year from today; your last contribution will be at age 65; your portfolio earns a real annual rate of return of 5.47%, compounded annually. Do not round at intermediate steps in your calculation. Round your answer to the nearest dollar. Do not type the $ symbol.

Reference no: EM131813319

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