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Prepare an amortization spreadsheet in Excel.  The sheet should be labeled, and I should be able to...

Prepare an amortization spreadsheet in Excel.  The sheet should be labeled, and I should be able to change purchase price, interest rate, or the other relevant factors and the spreadsheet should automatically update. As we discussed in class, spend some time labeling the spreadsheet and using proper cell references.  This is the first but not the last spreadsheet of this type, it is highly likely that elements of this spreadsheet will be helpful in subsequent assignments, so time spent here may mean less time in the future.

For an initial calculation, assume you are purchasing a $400,000 home with 5% down at an interest rate of 4%, financed over 30 years using a traditional mortgage.

Solutions

Expert Solution

Purchase price of a home 400000
Loan amount- 5% of purchase price 400000*5% 20000
amount financed 380000
Interest rate 4%
Period - Years 30
Annual payment - Using PMT function in MS excel PMT(rate,nper,pv,fv,type) rate =4% nper =30 pv =380000 fv =0 type =0 ($21,975.44)
Amortization schedule
Year beginning balance annual payment Interest = beginning balance*interest rate principal amortized = annual payment-Interest year end balance = beginning balance-principal amortized
1 380000 21975.44 15200 6775.44 373224.56
2 373224.56 21975.44 14928.9824 7046.4576 366178.1024
3 366178.1024 21975.44 14647.1241 7328.315904 358849.7865
4 358849.7865 21975.44 14353.99146 7621.44854 351228.338
5 351228.338 21975.44 14049.13352 7926.306482 343302.0315
6 343302.0315 21975.44 13732.08126 8243.358741 335058.6727
7 335058.6727 21975.44 13402.34691 8573.093091 326485.5796
8 326485.5796 21975.44 13059.42319 8916.016814 317569.5628
9 317569.5628 21975.44 12702.78251 9272.657487 308296.9053
10 308296.9053 21975.44 12331.87621 9643.563786 298653.3416
11 298653.3416 21975.44 11946.13366 10029.30634 288624.0352
12 288624.0352 21975.44 11544.96141 10430.47859 278193.5566
13 278193.5566 21975.44 11127.74227 10847.69773 267345.8589
14 267345.8589 21975.44 10693.83436 11281.60564 256064.2532
15 256064.2532 21975.44 10242.57013 11732.86987 244331.3834
16 244331.3834 21975.44 9773.255335 12202.18466 232129.1987
17 232129.1987 21975.44 9285.167948 12690.27205 219438.9267
18 219438.9267 21975.44 8777.557066 13197.88293 206241.0437
19 206241.0437 21975.44 8249.641749 13725.79825 192515.2455
20 192515.2455 21975.44 7700.609819 14274.83018 178240.4153
21 178240.4153 21975.44 7129.616612 14845.82339 163394.5919
22 163394.5919 21975.44 6535.783676 15439.65632 147954.9356
23 147954.9356 21975.44 5918.197423 16057.24258 131897.693
24 131897.693 21975.44 5275.90772 16699.53228 115198.1607
25 115198.1607 21975.44 4607.926429 17367.51357 97830.64715
26 97830.64715 21975.44 3913.225886 18062.21411 79768.43304
27 79768.43304 21975.44 3190.737322 18784.70268 60983.73036
28 60983.73036 21975.44 2439.349214 19536.09079 41447.63958
29 41447.63958 21975.44 1657.905583 20317.53442 21130.10516
30 21130.10516 21975.44 845.2042064 21130.23579 0

jeff jeffy answered 20 hours ago
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