Excel Assignment

- Income: $3,500/month (from current job) + $800/month (8*4*$25) (teaching lessons to 8 students, 4 lessons/month per student, and charging $25 per lesson)

- Expenses: $3,120/month

- Current mortgage rates are quite low around 4% annually, although there are rumors that the rate may go up to 5% annually within the next few months.

- Banks interest rate charge goes up by 1% (annually) if the down payment drops from 20% to 15%.

Question 1:

What is the maximum mortgage amount (total) Ms. Monica Jones can afford assuming a 25- year mortgage and a 20% down payment? (She will make monthly mortgage payment). Show detail financial modeling steps. The whole model should be interactive and the formula should be linked.

Question 2:

Do the above calculations using 15% down payments. Also, develop scenarios for 8 students, 10 students, and 12 students per month in the painting school. Be conservative with your interest rate prediction. Make other necessary assumptions.