Answer:
The answer to the question is
Her monthly payments will be $279.98
Step-by-step explanation:
To solve the question we apply the equation for monthly payments as follows
Fixed monthly mortgage repayment formula is
[tex]A = P*r*\frac{r(1+r)^n}{(1+r)^n -1}[/tex]
Where
A = Payment amount per month
r = interest rate = 4.25 %
n = number of months = 20×12 months or 240 months
P = Mortgage value = $155,000
Therefore A = [tex](0.0425)(155000)\frac{0.0425(1+0.0425)^{240}}{(1+0.0425)^{240} -1}[/tex] = $279.98
For balloon mortgage the loan balance is paid off or refinanced at the end of the loan term
