John purchased a house in Atlanta. He made no down payment so the principal of the mortgage equals to the price of the house: $234,000. The APR of his mortgage is 5%. The interest is compounded monthly. He made an agreement with the bank that he would pay off the mortgage in 30 years.

Six years later, the businessman did very well at his job. He saved enough money to make a $80,000 payment to the lender to get rid of the mortgage sooner. His salary doubled, which makes him able to afford higher monthly payments. Also, his risk gets lower so the lender charges him less interest now. He plans to pay off the mortgage in another six years.

In the spreadsheet,

1. Calculate the monthly payment of the first period. (5 pts)

2. Complete the amortization table of the first six years. (10 pts)

3. Calculate the starting balance and monthly payment of the second period. (5 pts)

4. Complete the amortization table of the second period. (10 pts)