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You would like to buy a house that costs $350,000. You have $50,000 in cash that...

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Finance

You would like to buy a house that costs $350,000. You have$50,000 in cash that you can put down on the house, but you need toborrow the rest of the purchase price. The bank is offering you a30-year mortgage that requires annual payments and has an interestrate of 7% per year. You can afford to pay only $23,500 per year.The bank agrees to allow you to pay this amount each year, yetstill borrow $300,000. At the end of the mortgage (in 30 years),you must make a balloon payment; that is, you must repay theremaining balance on the mortgage. How much will be this balloonpayment?

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