Question
Victor Connors work at Home Trust Mortgage (HTM) company. One of his duties at work is to prepare informative tables, charts and graphs showing monthly
Victor Connors work at Home Trust Mortgage (HTM) company. One of his duties at work is to prepare informative tables, charts and graphs showing monthly payments to clients for various loan amounts. You are Victors assistant. You should help him with the following: Consider a $300,000 loan to be repaid in equal end of month installments for the next 30 years at an interest rate of 4.25 percent (compounded monthly). Now answer the following based on the loan above:
1. Calculate monthly payments to pay off the mortgage.
2. Set up an amortization schedule. What is the remaining balance after 6 years (72 payments)?
3. Create a graph showing how the monthly payments are shared between interest and principal. How much is paid towards interest payments over these 30 years. 4. What would be your overall savings if the interest rate were to decline to
4.125 percent instead of 4.25 percent original rate if you made an initial payment of $2,000? Is it worth making this payment.
Make sure to answer questions 1, 2, and 3 in Sheet 1 and question 4 in Sheet 2.
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