Amortization Schedules

This project requires you to elaborate an amortization schedule for two types of loans, a fully amortizing constant payment mortgage (CPM) loan and a constant amortizing (CAM) loan. In your report, compare the amortization schedule of the CPM and CAM loans (How are they similar? How are they different? Which would you prefer and why?)

Part 1: Monthly Payment

Consider a $10,000 loan made at a 12 percent annual (nominal) rate of interest for 3 years.

A) Calculate the constant monthly mortgage payments on this loan, assuming it is to be fully amortized at the end of 3 years. Be sure to use the excel PMT function to calculate the monthly payment (see https://support.office.com/en-us/article/PMT-function-0214da64-9a63-4996bc20-214433fa6441) (10 Points)

Part 2: CPM Loan

Consider a $10,000 fully amortizing CPM loan made at a 12 percent annual (nominal) rate of interest for 3 years.

B) Fill in the amortization schedule for each month (calculate or fill in the values of beginning loan balance, monthly payment, interest, amortization, and ending loan balance). Be sure to show calculations if needed (i.e. do not simply type in values but reference other cells to compute the calculations) (30 points)

Part 3: CAM Loan

Consider a $10,000 CAM loan made at a 12 percent annual (nominal) rate of interest for 3 years.

C) Fill in the amortization schedule for each month (calculate or fill in the values of beginning loan balance, monthly payment, interest, amortization, and ending loan balance). Be sure to show calculations if needed (i.e. do not simply type in values but reference other cells to compute the calculations) (30 points)

FINC 4355 - Project 1 - Amortization Schedules Last Name First Name Part 1: A) Monthly Payment Loan amount Nominal rate Number of years Periodic rate Number of periods Monthly payment Part 2: B) Amortization Schedule CPM Month Beginning Loan Balance Monthly Payment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Interest 29 30 31 32 33 34 35 36 Part 3: C) Amortization Schedule CAM Month Beginning Loan Balance Interest 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Amortization Amortization Ending Loan Balance Monthly Payment Ending Loan Balance