The LOAN Procedure

You specify balloon payment loans like fixed rate loans, with the additional specification of the balloon payments. Assume you have an alternative to finance the $100,000 investment with a 15-year balloon payment loan. The annual nominal rate is 7.5%, as in the fixed rate loan. The terms of the loan require two balloon payments of $2000 and $1000 at the 15th and 48th payment periods, respectively. These balloon payments keep the periodic payment lower than that of the fixed rate loan. The balloon payment loan is defined by the following BALLOON statement:

proc loan start=1998:12;
   balloon amount=100000 rate=7.5 life=180
           balloonpayment=(15=2000 48=1000)
           label = 'BANK2, with Balloon Payment';
run;