You need a 30-year, fixed-rate mortgage to buy a new home for $220,000. Your mortgage bank will lend you the money at a 7.1 percent APR for this 360-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.
Required:
How large will this balloon payment have to be for you to keep your monthly payments at $950?
A) $657,585.25
B) $51,269.42
C) $78,637.68
D) $683,888.66
E) $637,857.69