Example - Loan with Balloon Payment

Facts     Samuel borrows $100,000 from Kingston Finance on November 24, 2025. The loan bears interest at 7.29% and calls for 120 equal monthly payments beginning December 24, 2025. Samuel plans to pay off the remaining balance with a Balloon Payment after 60 payments.

Needed     The Monthly Payment Amount and the Balloon Payment Amount.

Settings     This example assumes Normal amortization (Compute Method) and a Year Length of 365 days (set in the Calculations group on the Configuration ribbon).

1. Enter the cash flow information for the original loan as shown below.

   ** SCREEN SHOT HERE **

2. Press [F9], [Ctrl]+[U], or click Calculate from the Compute group to calculate the Monthly Payment Amount.

   The Monthly Payment based on a 10 year (120 months) amortization is $1,176.09.

3. Change the Number of payments on line 2 from 120 to 60. This represents the Number of payments made before the Balloon Payment.
4. Enter a Payment cash flow line for an Unknown Amount on the Date of the Balloon as shown below.

   ** SCREEN SHOT HERE **

5. Press [F9], [Ctrl]+[U], or click Calculate from the Compute group to calculate the Balloon Payment Amount.

Solution     The Payment Amount amortized over 120 months is $1,176.09. The Balloon Payment on November 24, 2025 will be $58,986.00.