Question

Alex loans Nomar $100,000 at a rate of 12% nominal interest convertible quarterly. They agree that Nomar will repay the loan by making quarterly payments. These payments will each be $23,000 except for the last payment which will be a balloon payment. Find the amount of the balloon payment. (Round your answer to the nearest cent.)

Answer 1

Hey Sir/ Mam

YOUR REQUIRED ANSWER IS $39,327.46

Given that:

Loan Amount = $100,000

Rate of Interest = 3% per quarter

As the loan period is not mentioned, hence, taking the most obvious assumption, i.e. the loan is for 1 year period, hence,

The loan amortization schedule:

Quarter	Opening Balance	Interest	Payment	Closing Balance
1	$100,000.00	$3,000.00	$23,000.00	$80,000.00
2	$80,000.00	$2,400.00	$23,000.00	$59,400.00
3	$59,400.00	$1,782.00	$23,000.00	$38,182.00
4	$38,182.00	$1,145.46	$23,000.00	$16,327.46

I hope this solves your doubt.

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