Jay would like to purchase a machine which has a life of 10 years. The machine costs $850,000, The bank will loan 80% of the cost at an interest rate of 2.75% per year compounded quarterly if Jay agrees to make a payment of $5,000 at the beginning of each month for five years and a balloon payment at the end of the machine life. How much will the balloon payment be?

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To calculate the balloon payment at the end of the machines life we need to determine the monthly pa... View the full answer