Mortgage Amortization Formula with Balloon Payment
A = \frac{iP(1+i)^n}{(1+i)^n - 1} - \frac{iB}{(1+i)^{n+1} - (1+i)}
where:
- A = periodic payment amount
- P = amount of principle or loan owing (subtracting any down-payments)
- i = period interest rate
- n = total number of payments
- B = Final Balloon Payment
- If B = 0, then the amortization formula is the same as the basic one
You can watch the proof of this formula here: