You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,500 per year. The bank agrees to allow you to pay this amount each year, yet still borrow $300,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will this balloon payment be?

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the QUESTION in the BLACK SQUARE

the ANSWER in the GREEN SQUARE

A) what is the solution?

B) what is the formula that I should use it in Excel to solve this

Problem 437 You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments bank agrees to allow you to pay this amount cach year vet still borrow $300.000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will this balloon payment be? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type numerical data into a cell or function. Instead, make a reference the cell in ow. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. House price 50.000 nt 300,000 Loan amount Number of perlods 30 Interest rate 7% Annual payment 23,500 PV of payments er payments Balloon payment Requirements 1 In cell D13, by using cell references, calculate the present value of the payments that you will make every year. Note: The output of the expression or function you typed in this cell is expected as a positive number. (1 pt.). 2 In cell D14, by using cell references, calculate the difference between the original loan f the nrascio or function wou tuned in this cell is exnected as a nositive number (1 pt.). In cell D15, by using cell references, calculate the balloon payment to pay off the mortgage typed i the end of the loan. Note: The output of the expression or function you this cell is expected as a positive number. (1 pt.). 4-37