Consider a traditional 30-year fixed rate mortgage, borrowing $400,000 (present value) at an annual interest rate of 3.25%, payable in monthly payments. Create an Excel spreadsheet and use basic math functions to develop a schedule for the entire life of the loan. Your table should include columns for Payment #, Principle Remaining, Interest Paid, Principal Paid, Cumulative Interest Paid, and Cumulative Principal Paid. Then use this table to answer the following questions: c. How much did the borrower pay in total to pay off this loan, if they paid just the minimum payment for the entire 30 years? And how much of that total is just interest? d. Create a graph of the interest and principal amounts paid each month, for just the first two years of the loan. (Hint: use an “X Y Scatter” chart type) e. Bonus question: How much sooner (in months) would the borrower pay off this loan, if they paid an extra $100 per month? Your Excel spreadsheet must show this calculation
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Consider a traditional 30-year fixed rate mortgage, borrowing $400,000 (
c. How much did the borrower pay in total to pay off this loan, if they paid just the minimum payment for the entire 30 years? And how much of that total is just interest?
d. Create a graph of the interest and principal amounts paid each month, for just the first two years of the loan. (Hint: use an “X Y Scatter” chart type)
e. Bonus question: How much sooner (in months) would the borrower pay off this loan, if they paid an extra $100 per month? Your Excel spreadsheet must show this calculation
The loan repayment schedule is a preparation of a schedule that represents the information pertaining to the repayment of a loan. This includes the monthly payment amount, interest payable, principal payable, and the outstanding principal for that duration. The shorter the duration of the loan, the higher will be the periodic payment.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
