Set to End mode. Press
Table 6-5 Calculating the maximum purchase price
Example: A Mortgage With a Balloon Payment
You've obtained a 25 year, 172,500 mortgage at 8.8% annual interest. You anticipate that
you will own the house for four years and then sell it, repaying the loan with a balloon
payment. What will your balloon payment be?
Solve this problem using two steps:
Calculate the loan payment using a 25 year term.
2. Calculate the remaining balance after 4 years.
First calculate the loan payment using a 25 year term.
if BEGIN annunciator is displayed.
Sets periods per year.
Stores the length of the
mortgage (30 × 12).
Pays mortgage off in 30 years.
Stores interest rate.
Stores desired payment (money
paid out is negative).
Calculates the loan you can
afford with a 930 payment.
Adds 12,000 down payment
for the total purchase price.
Time Value of Money Calculations