Problem:
You needed a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank lent you the money at a 7.5 percent APR for this loan with monthly payments, with interest compounded monthly. Subsequently, you paid off the remaining loan balance in the form of a single balloon payment of $220,158.12.
Required:
Question: How many payments in total did you make prior to the single balloon payment?
Note: Provide support for your underlying principle.