You have just arranged for a $1,800,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 7.8 percent, and it calls for monthly payments over the next 30 years. However, the loan has an eight-year balloon payment, meaning that the loan must be paid off then. How big will the balloon payment be? How do I solve on a Financial Calculator ?

$556063.77 is the balloon payment in order to finish the loan in 8 years.

Explanation:

Firstly we will use the Present value formula annuity to find how much will we pay on a monthly basis for the 30 year mortgage loan so we are given :

Pv the present value of the mortgage is $1800000

i which is the interest rate 7.8%/12 as there will be monthly payments

is the number of payments which are 30 x 12 = 360 payments

then we substitute on the formula Pv= C[(1-(1+i)^-n) /i]

we are looking for C the monthly payments

$1800000= C[(1-(1+(7.8%/12))^-360)/(7.8%/12)] now divide by the coefficient of C both sides to solve for C

$1800000/[(1-(1+(7.8%/12))^-360)/(7.8%/12)] = C

$12957.66= C

now if the monthly payment is $12957.66 we will find how much we will pay in 8 years which will be $12957.66 x 12 x 8 = $1 243 936.23 now if this amount is covered for 8 years then the balloon payment is $1800000 - $1243936.23 = $ 556063.77 which is the remaining amount in present value terms, this is the balloon payment to finish the mortgage in 8 years.

PLEASE FIND THE ANSWER IN THE ATTACHMENT

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know