You are planning to purchase a house that costs $747.50. You plan to put 20% down and borrow the remainder. You have been pre-approved, based on your credit score and income, for a 30-ye rate of 4.03%. ar loan with an interest Use function "PV" to calculate the loan amount given a paymert of $2900 per month. What is the most that you can borrow? Use function .PMT" to calculate your mortgage payment. Use function "RATE" to calculate the interest rate given a payment of $2600 and a loan amount of For each scenario, calculate the total interest that will have been paid once the mortgage is paid off. (There is not a function for this, enter the formula into the cell.) For each scenario, calculate the total cost of the home purchase. (Down payment plus principle (loan amount) plus interest.) 1. 2. 3. 4, 5. 6. Assume that you plan to pay an extra $500 per month on top of voiur.mortgage payment, calculate how long it will take you to pay off the loan given the higher payment. (use interest rate of 4.03%). Calculate how much interest you will pay in total. Compare this to the total interest value that you calculated for #2. You want to determine whether or not you should save some of your money and put only 10% down on my house. Because you are only putting 10% down, lenders require that you purchase private mortgage insurance (PMI). Assume that your annual PMI premium is .52% of the mortgage amount. Divide this by 12 to get the monthly payment. Use Excel for all calculations. 7, Calculate your total monthly payment (mortgage payment plus PMI). (The mortgage amount will be 90% of the price of the home, Calculate the total cost of financing your home purchase (interest plus PMI) Assume that you can stop paying mortgage insurance after 8 years given that the value of your house will appreciate and the balance of your mortgage will decrease. Calculate the total cost of the home purchase (Down payment plus principle (loan amount) plus interest plus PMI.) 8. 9. 10. Compare this to the costs associated with a 20% down payment. Memo 1. 2. 3. Summarize the results of each of your calculations. Discuss the interest savings associated with an extra payment of $500 per month. Discuss Private Mortgage Insurance. What is it? Why do lenders require it? What is the benefit to the borrower? Compare the costs and benefits of a 10% down payment versus a 20% down payment. 4