Question

In: Statistics and Probability

How to create the graph? Make a graph of the average life vs the contract rate...

How to create the graph? Make a graph of the average life vs the contract rate c, where 0 ? c ? 100% and T=30y. In you submission, show the amortization table for c=5% (and make sure it fits on one page and is annotated)

Solutions

Expert Solution

IN T=30Y , T AND Y ARE UNDEFINED.

1. Steps of making graphs

  1. Open Microsoft Excel. Its app icon resembles a green box with a white "X" on it.
  2. Click Blank workbook. ...
  3. Consider the type of graph you want to make. ...
  4. Add your graph's headers. ...
  5. Add your graph's labels. ...
  6. Enter your graph's data. ...
  7. Select your data. ...
  8. Click the Insert tab.

The average life is the length of time the principal of a debt issue is expected to be outstanding. The average life is an average period before a debt is repaid through amortization or sinking fundpayments.

In an amortization schedule, the percentage of each payment that goes toward interest diminishes a bit with each payment and the percentage that goes toward principal increases.

LETS TAKE AN EXAMPLE OF AMORTIZATION TABLE:-

Month Month 1 Month 2 Month 3
Total Payment $1,266.71 $1,266.71 $1,266.71
Principal $329.21 $330.45 $331.69
Interest $937.50 $936.27 $935.03
Total Interest $937.50 $1,873.77 $2,808.79
Loan Balance $249,670.79 $249,340.34 $249,008.65

orchestra answered 2 years ago
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