A. You are thinking of purchasing a house that costs $235,000. You have $12,000 in cash that you can use as a down payment, but you need to borrow the rest of the purchase price. Assume there are no closing costs. The bank is offering a 30-year mortgage that requires monthly payments and has an annual interest rate of 4.25% per year. - What will your monthly payments be if you sign up for this mortgage? Present the amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) on a monthly basis using Excel. Calculate the total amount of interest paid throughout the life of the loan (sum up the amounts in the Interest column). Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan. B. Suppose you have the option to take out a 15-year mortgage with an annual interest rate of 3.55%. What will the new monthly payment be? Present a new amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) on a new excel worksheet. Calculate the total amount of interest paid throughout the life of the loan (sum up the amounts in the Interest column). Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan. C. How much do you save if you go with the 15-year mortgage versus the 30-year mortgage example above? Compute the difference between the total interest paid in parts A and B. A. You are thinking of purchasing a house that costs $235,000. You have $12,000 in cash that you can use as a down payment, but you need to borrow the rest of the purchase price. Assume there are no closing costs. The bank is offering a 30-year mortgage that requires monthly payments and has an annual interest rate of 4.25% per year. - What will your monthly payments be if you sign up for this mortgage? Present the amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) on a monthly basis using Excel. Calculate the total amount of interest paid throughout the life of the loan (sum up the amounts in the Interest column). Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan. B. Suppose you have the option to take out a 15-year mortgage with an annual interest rate of 3.55%. What will the new monthly payment be? Present a new amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) on a new excel worksheet. Calculate the total amount of interest paid throughout the life of the loan (sum up the amounts in the Interest column). Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan. C. How much do you save if you go with the 15-year mortgage versus the 30-year mortgage example above? Compute the difference between the total interest paid in parts A and B
