
Another example: TVM calculations
Suppose you have taken out a 30-year, $150,000 house mortgage at 6.5% annual interest. You expect to sell
the house in 10 years, repaying the loan in a balloon payment. Find the size of the balloon payment—that is,
the value of the mortgage after 10 years of payment.
The following cash ow diagram illustrates the case of a mortgage with balloon payment.
1.
To open the Finance app, press and select Finance.
2.
To return all elds to their default values, press .
3. Enter the known TVM variables, as shown in the following gure.
328 Chapter 19 Finance app
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