Required:
You are looking to purchase the latest model of the BMW 750 luxury sedan. The price of the car is $82,000. However, you negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,500 per month for the following five years, with a balloon payment at the end to cover the remaining principal of the loan. The APR interest rate on the loan with monthly compounding is 7 percent.
Required:
Question: What will be the amount of the balloon payment six years from now?
Note: Please provide equation and explain comprehensively and give step by step solution.