tmac --

Maybe I don't understand the problem. Let's say it's a $100,000 loan in
which you're paying back the interest (let's say 10%), every six months,
until the prinicipal is due back, after 10 years.

If that's the case, then you owe 1/2 year's worth of interest every six
months, which would be 5% of $100k or $5,000. At the end of the 10 years,
you'd pay back the original $100k principal.

I'm probably not understanding the situation, though. How is it different
from the above?

"tmac" wrote:

Does anyone know the formula to calculate semi-annual interst only payments
with a balloon in 10 years? I thought it was IPMT, but it does not appear
correct. I thought the interest payment would remain the same for each
semi-annual payment until the principal balloon payment is made in year ten.