Jenna is the beneficiary of a fund of 20,000 that pays her 1,000 at the end of each month. The fund earns 6% compounded monthly. The final payment to exhaust the fund will be a balloon payment. Calculate the amount of the balloon payment.

Given

Fund Amount P=20000

Payment each month A=1000

Interest rate per month r=6%/12=0.5%

Let B is balloon payment and N is the total number of Payment

so P=A * (1 - (1+r) ^ - (N-1)) / r + B / (1+r) ^N

20000=1000 * (1 - (1+0.5%) ^ (N-1)) / 0.5% + B / (1+0.5%) ^N

By using the trial and error method we find that N=21

So B / (1+0.5%) ^21=1012.53

B=1124.39