Roger Sterling has decided to buy an ad agency and is going to finance the purchase with seller financing— that is, a loan from the current owners of the agency.
The loan will be for $ 2,000,000 financed at a 7 percent nominal annual interest rate. This loan will be paid off over 5 years with end- of- month payments along with a $ 500,000 balloon payment at the end of year 5. That is, the $ 2 million loan will be paid off with monthly payments and there will also be a final payment of $ 500,000 at the end of the final month. How much will the monthly payments be?