Question: Mike Bayles has just arranged to purchase a $ 5 0 0 , 0 0 0 vacation home in the Bahamas with a 2 0

Mike Bayles has just arranged to purchase a $

500, 000

vacation home in the Bahamas with a

20 %

down payment. The mortgage has an

9 %

stated annual interest rate, compounded monthly, and calls for equal monthly payments over the next

30

years. His first payment will be due one month from now. However, the mortgage has an ten

-

year balloon payment, meaning that the balance of the loan must be paid off after the last payment of year ten. How much will Mike's balloon payment be in ten years?

Mike Bayles has just arranged to purchase a $500,000 vacation home

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