How large will this balloon payment have to be for you to


You need a 30-year, fixed-rate mortgage to buy a new home for $300,000. Your bank will lend you the money at 6 percent APR for this 360 month loan. (Payments are made monthly.) However, you can only afford monthly payments of $1700, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1700?

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Financial Management: How large will this balloon payment have to be for you to
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