Loan Period: 50 years, 2 payments a year

Interest Rate: 6% amortized over 25 years

1. (75 points total) A half section of irrigated farmland (i.e. 320 acres) has just become available and you approach your Uncle about buying the land. The asking price is $6,500/acre but you figure it can be had for $6,200/acre. You have $12,000 to contribute and your Uncle agrees to put $300,000 toward the purchase with the remaining amount being financed with Farm Credit Services (FCS) of America. Answer the following questions: e. (10 points) Use the PVA and FVA annuity formulas and your calculator (i.e. not Excel to corroborate this outstanding loan balance (i.e. the amount still owed after the 27t payment). Recall, an outstanding loan balance (OLB) is always the PV of the remaining payments as well as the FV of the payments already made. f. (20 points) Construct two graphs in Excel. The first graph should show the principal and interest paid in each period as a "Stacked Column" chart. The second graph should shovw the OLB in each period as a "Scatter with Smooth Lines" chart. Make sure to label your axes and title your graphs for full credit (5 points) How much total interest will you pay on the loan if it goes to maturity? g. 1. (75 points total) A half section of irrigated farmland (i.e. 320 acres) has just become available and you approach your Uncle about buying the land. The asking price is $6,500/acre but you figure it can be had for $6,200/acre. You have $12,000 to contribute and your Uncle agrees to put $300,000 toward the purchase with the remaining amount being financed with Farm Credit Services (FCS) of America. Answer the following questions: e. (10 points) Use the PVA and FVA annuity formulas and your calculator (i.e. not Excel to corroborate this outstanding loan balance (i.e. the amount still owed after the 27t payment). Recall, an outstanding loan balance (OLB) is always the PV of the remaining payments as well as the FV of the payments already made. f. (20 points) Construct two graphs in Excel. The first graph should show the principal and interest paid in each period as a "Stacked Column" chart. The second graph should shovw the OLB in each period as a "Scatter with Smooth Lines" chart. Make sure to label your axes and title your graphs for full credit (5 points) How much total interest will you pay on the loan if it goes to maturity? g