In purchasing a house that is worth $175,000, you need to obtain a mortgage. Suppose you choose a 30- year fixed rate mortgage with an interest rate/year of 9.74%.

a. What is the annual payment required?

b. How much of each years payment goes to paying interest and how much to reduce the principal balance for the first 15 years?

Please solve in Excel for cells B10, B12, B13, and B16. Please show your work/formulas for how you got your answers.

A B D E F G H - J K L M N o Q $ 175,000.00 9.74% 30 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 $175,000 1 Inputs 2 Present value 3 Interest rate / year 4 Number of years 5 6 7 Outputs 8 Year 9 Beg. Principal Balance 10 Payment 11 Interest Component 12 Principal Component 13 End Principal Balance 14 15 16 Total Interest Payment 17 18 19 $17,045