1. Consider a mortgage loan for $700,000. The interest rate is 8.4 percent per year compounded monthly, Loan Term = 10 years with payments made end of month.

1. Fully Amortizing Loan: Using Excel, generate an Amortization Table corresponding to a fully amortizing loan that will be fully repaid at the end of the loan term. Use that Table to generate a graph like the panel A of Exhibit 4.2. Note that it should show two lines on the same graph one for monthly payment and the other for monthly interest. Make sure the X and Y axes are labeled properly.

2. Partially Amortizing Loan: Using Excel, generate an Amortization Table corresponding to a partially amortizing loan where your constant monthly payment is $6,000. Use that Table to generate a graph like the panel B of Exhibit 4.2. Make sure the X and Y axes are labeled properly.

At the end of the original loan term, what is the balance on the loan?

3. For the fully amortizing Loan, use Excel to generate a table that shows the monthly payment vs loan term. Let the loan term start at 10 years (120 months) and go up to 30 years (360 months), in one-month increments. Obviously, the loan amount and interest rate will remain the same

Use that Table to generate a graph like Exhibit 4.3. Make sure the two axes are labeled properly