Mr. and Mrs. Jolly are interested in a 5-year home equity loan of $500,000 to extend their home. The local bank is prepared to consider the request to extend a loan using Jolly's home as collateral. Their home has been appraised at $1,500,000 and the bank permits customers to use no more than 70 percent of the appraised value of a home as a borrowing base. The Jolly's still owe $900,000 on the first mortgage against their home. They are both permanently employed with a total income of $25000. Their expenses average $10,000/month. The couple have savings of $250,000 with the bank and government bonds valued at $350,000. They would like to keep their savings free to use for a family vacation whenever they wish. 1. Calculate the residual value left in Jolly's home to support the loan request? (2 marks) 2. Prepare an amortization schedule assuming that the interest rate on the loan is 6%. (5 marks) 3. What are your credit concerns and recommend what can be done to reduce the risk