In this assignment you$$ll create an amortization table for a loan with respect to a set of spot

rates. Read all of the questions before you start designing your spreadsheet to solve them.

Doing so may allow you to create a single spreadsheet that works for all the problems rather

than having to create a new one for each part.

$1.$ Create a spreadsheet to calculate the original principal amount for a $30-$year loan that you

repay with $360$ monthly $$1,302-$payments. Interest for the loan is calculated with respect to

spot rates that start at $0\mathrm{.}01$ and increase by $10$ basis points for each year of duration. More

specifically, if t is measured in years, iS

t $=0\mathrm{.}01$ for all $0<$ t $<=1,$ iS

t $=0\mathrm{.}011$ for all $1<$ t $<=2,$

iS

t $=0\mathrm{.}012$ for all $2<$ t $<=3,$ etc. Recall that spot rates are measured annually.

$2.$ For the loan in problem $1,$ calculate the amount of interest that you pay for each payment,

the amount of principal repaid, and the remaining loan balance, i$.$e$.,$ make an amortization

table. Be careful$$the final loan balance should be zero!

$3.$ Look carefully at the column of interest payments. Describe what you see and carefully

explain the behavior.