What was the size of the balloon payment if interest rate

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A small industrial contractor purchased a warehouse building for storing equipment and materials that are not immediately needed at construction job sites.

The cost of the building was $100.000, and the contractor made an agreement with the seller to finance the purchase over a 5-year period.

The agreement stated that monthly payments would be made based on a 30- year amortization, but the balance owed at the end of year 5 would be paid in a lump-sum balloon payment.

What was the size of the balloon payment if the interest rate on the loan was 6% per year, compounded monthly?

Reference no: EM131985498

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