Balloon Payment

What would be the balloon payment at the end of 5 years on a $50,000 loan with monthly payments based on a 30 year term at 8% compounded monthly?

This scenario involves two steps.

Step 1: Calculate the loan's monthly payment (based on 360 payments)

Enter the following values:
Present Value = 50,000
Future Value = 0
Periods = 360 (i.e. 30 x 12)
Periods/Year = 12
Interest Rate = 8
Set Payment/Deposit Timing for End.

Now click the Payment/Deposit button. Result is a monthly payment of $366.88.

Step2: Calculate the loan balance and balloon payment at the end of 5 years

Change the entry for Periods to 60 to reflect a time span of 5 years (i.e. 5 x 12 = 60).

Now click the Future Value button. Result is a balance of $47,535.10 at the end of 5 years.

The amount of the loan's last payment, being a balloon payment, is the monthly payment amount plus the ending balance (366.88 + 47,535.10 = 47,901.98).

The balloon payment would be $47,901.98.

See the screen snapshots of this calculation below:

Examples

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