You must repay the remaining balance on the mortgage

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Reference no: EM132017724

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 you a 30-year mortgage that requires annual payments and has an interest rate of 7 % per year. You can afford to pay only $ 23,450 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. How much will be this balloon payment?

Reference no: EM132017724

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