Solution 11274: Calculating a Balloon Payment on the BA Real Estate.
How do you calculate a Balloon Payment on the BA Real Estate?
To calculate a balloon payment on the BA Real Estate, please follow the example below.
You are buying a $75,000 lake house. With a 10% down payment, the interest rate will be 9.25% amortized over a 30-year period. However, the loan will be due and payable at the end of 15 years. How much will the balloon payment be at the end of 15 years?
• Press [2nd][CLR TVM] to clear all TVM values.
• Press [2nd][P/Y] and set the P/Y and C/Y to twelve.
• Enter 30 and press the [TRM] key.
• Enter 9.25 and press the [I%] key.
• Enter 75  and press the subtraction key, then enter 10 and the [%] key. Press the [=] key and then press the [LOAN] key to store 67,500. The 67,500 represents the loan amount.
• Compute the payment by pressing [CPT][PMT] which will give you -555.31. Round the result by pressing [2nd][ROUND][PMT].
• Enter the number of payments made in 15 years by entering 15 times 12 and press the [=] key. After you receive the result of 180, press [2nd][N] to store 180 as the term.
• Compute the unpaid balance by pressing [CPT][FV]. The Future Value would be -53,953.92.
Add the monthly payment to find the balloon payment by pressing [+][RCL][PMT][=], the final balloon payment is -54,509.23.
Please see the BA Real Estate guidebook/worksheets for additional information.