Buying a house for $205,000. The loan is at a fixed APR of 3.5% for 30 years.

Making a down payment

1.If a 10% down payment is required, calculate this amount: ______________

2.What amount remains to be financed (this will be your loan amount)? _____________

3.Use the "Loan Payment Formula" to calculate your monthly payment: ______________

(Note that property tax and homeowner's insurance will usually be added to the monthly payment, but we will look at just the payment on the principal for comparison purposes.)

4.A table of principal and interest payments over the life of a loan is called an amortization table.Amortization tables can be built by hand but are ideally built with a spreadsheet or using an online tool.Go to Canvas and use the "Amortization Table Spreadsheet for Chapter 4 Lab" to complete the Amortization Table below.

To use the spreadsheet, enter the loan amount or "balance" from part (2) as the "Loan Amount".Then enter the number of years and interest rate.The spreadsheet will automatically fill.You do NOT have to record the entire spreadsheet, just record the rows that correspond with the table below.Pay attention to what each column means as you will analyze this info later in this lab.

Here is a setup of the excel file. If you enter the information correctly in excel, you should get the same results as shown here.

Commands for finding the interest and total payment plus down payment are

=SUM(C9:C368)

=SUM(B9:B368)+B1

Payment # Monthly Principal Interest Total balance

Payment Paid Paid interest

0 N/A N/A N/A N/A

1

2

3

360

5.Explain two interesting things from looking at the amortization table

6.Use the amortization table and record how much total interest you paid._$113,755.48___

1. Calculate the total you paid over the life of the loan (10% down, so add that in!).___$318,755.48________