There is a home you want to purchase with a selling price of $220,000. You have saved $42,000 for a down payment. The bank charges 2 points on the balance of the note (before taking fees into account) in exchange for a 3% rate. The bank also charges financing fees of $800. You request that the fees and points be added to the balance of the mortgage, which the bank agrees to.

Required:

Based on the preceding facts, prepare an amortization table for the mortgage assuming a 30 year note, and another amortization table assuming a 15 year note. Assume you take the loan out on July 1, 2020, and the first payment is due July 31, 2020. For each note, calculate the effective interest rate assuming the note is held to maturity.