The partnership has arranged financing in the amount of $1, 034, 600 at 7%
compounded semi-annually, with a 15 year amortization and 5 year term,
a. How many months
c. Interest for first month
a. The five year term means that there will be 10 semi-annual payments and then the entire remaining balance is due. The final payoff is normally called a balloon payment. There is a balloon payment because the loan is being amortized over 15 ...
The solution explains how a 15 year amortization can result in a five year note. The payment amounts are calculated including the balance on the note at the end of five years.