You are thinking of purchasing a house that costs $225,000. You have $35,000 in cash that you can use as a down payment, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires monthly payments and has an annual interest rate of 4.43% per year.

Suppose the interest rate decreases to 4.07% per year and the length of repayment decreases to 15 years.

- What will the new monthly payment be?

- Present a new amortization schedule (Beginning balance, Monthly payment, Principal payment, Interest payment, Ending balance) in a separate Excel sheet.

- Calculate the total amount of interest paid throughout the life of the loan.

- Create a graph depicting the changes in the portions of interest and principal for each monthly payment throughout the life of the loan.

How much do you save if you go with the 15-year mortgage versus the 30-year mortgage example above?