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Sagot :
A) Fully Amortizing, 30-year loan.
The Fixed Monthly Payment is $40,231 in the first years and then your last balloon payment will be $49,97,269
B) 30-year amortization, 10-year balloon
The Fixed Monthly Payment is $40,231 in the first years and then your last balloon payment will be $44,71,487
Thus, the total repayment is $92,99,223 from which the total monthly payment is $48,27,736, including a total interest payment of $42,99,223.
C) 15-year amortization, 10-year balloon
The Fixed Monthly Payment is $50,713 in the first 10 years and then your last balloon payment will be $24,43,032
Thus, your total repayment amount is $85,28,632 from which the total payment is $60,85,600, including a total interest payment of $35,28,632.
D) Advantages and Disadvantages
Advantages: Small businesses benefit from amortization because each time they make a payment, interest and principal are included in a clear, predetermined amount. An amortized loan enables the principal and interest to be spread out over time, creating a more manageable repayment schedule. On the other hand, an unamortized loan would have interest-only payments throughout and a balloon payment for the remaining principle at the end. Direct amortization has the advantage of being a feel-good option, as the burden of mortgage interest and the amount of debt is gradually reduced, and the property can be used as an investment option with an object yield
Disadvantages: The biggest problem with amortization is that sometimes the borrower is unaware of the exact amount of interest being paid. It's critical to calculate the entire interest paid and not only focus on the predetermined payback amount. The rising taxes and a potential lack of retirement funds are the drawbacks.
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