Calculate the Regular Payment with a Specified Balloon

Calculate the periodic payment amount required to result in a user‑specified final balloon payment. While many financial calculators can determine a balloon payment, the Ultimate Financial Calculator and the Balloon Payment Calculator can also calculate the regular periodic payment needed to reach a specified balloon amount. This gives you the flexibility to structure a loan according to your specific requirements.

All users should first complete the more detailed initial tutorial to understand the Ultimate Financial Calculator’s (UFC) basic concepts and settings.

To create a loan schedule with a known balloon payment amount and unknown periodic payments, follow these steps.

1. Set Schedule Type to Loan.
   • Alternatively, click New to clear any existing entries.
2. Click Settings, then select Rounding Options. Set “Rounding” to Open balance — no adjustment.
3. In the header section, apply the following settings:
   1. Select Normal for Calculation Method.
   2. Set Initial Compounding to Monthly.
   3. Enter 6.75 for Initial Interest Rate.

4. In row 1 of the cash‑flow input area, create a “Loan” series.
   1. Set the “Date” to July 1, 2020.
   2. Set the “Amount” to 365,000.00.
   3. Set “# Periods” to 1.
      • Note: Because the number of periods is 1, you will not be able to set a frequency. If a frequency is entered, it will be cleared when you exit the row.

5. Move to the second row of the cash‑flow input area. Select “Payment” for the “Series” type. In this example, you will create a schedule for a mortgage with a balloon payment of $250,000 due after 5 years (at the 60th monthly payment).
   1. Set the “Date” to August 1, 2020.
   2. Set the “Amount” to “Unknown” by typing U. Fig. 1.
   3. Set “# Periods” to 60.
6. Enter the known final balloon payment.
   1. Move to the third row of the cash‑flow input area. Select “Payment” for the “Series”.
   2. If not already set, enter the date as August 1, 2025 (end of the 5th year).
   3. Set the “Amount” to 250,000.00.
   4. Set “# Periods” to 1.

7. Click Calculate. The regular payment required to reach a $250,000 balloon payment after 5 years is $3,689.51. Fig. 2.

8. To view a detailed amortization schedule showing the calculated periodic payment and the final balloon payment, click Schedule on the button bar.

When a loan does not follow a conventional payment schedule, you need a financial calculator that allows flexible entry of irregular cash flows. The Ultimate Financial Calculator supports multiple payment streams with varying dates and amounts.

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