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## Tutorial 5: Principal Balance Left on a Loan after Payments have been made. Balloon loans

Try using different values, REMEMBER, always SUBTRACT the number of months from the original term of the loan.

Enter the numbers above in the boxes below. Do not enter a number in the box next to “Compute”.

Example 5: The original principal balance on the mortgage is \$100,000. The borrower is making 12 monthly payments a year of \$804.62 per month for 30 years (360 months). The interest rate is 9% p.a. (First calculate your monthly payments, Tutorial 4, or the original balance if you do not know it, Tutorial 6.)

The borrower has made 84 payments on the above mortgage. What is the principal balance now owed? NOTE If they have made 84 payments then they have 276 payments left.(360-84). Enter 276 in the number of payments box. Answer = \$93,639.44.

You can use this example to figure balloon payments. For example: a loan is to be amortized over 360 monthly payments with a balloon payment after 84 payments.