You are offered a $250,000, 30-year, 6% mortgage with a balloon payment of $50,000. The lender will

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You are offered a $250,000, 30-year, 6% mortgage with a balloon payment of $50,000. The lender will also charge a 2% origination fee.

a. What will the monthly payment be on this loan?

b. Assuming you hold the loan until maturity, what will the internal rate of return be on this loan? What is the effective annual rate?

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Personal Finance

ISBN: 978-1133595830

12th edition

Authors: Thomas Garman, Raymond Forgue

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Posted Date: Jul 02, 2023 11:48 PM

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You are offered a $250,000, 30-year, 6% mortgage with a balloon payment of $50,000. The lender will

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To calculate the monthly payment for the mortgage we can use the formula for a fixedrate mortgage M ... View the full answer

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