Question

You are considering the purchase of a new home offered at a price of $225,000. Create an amortization table in a new workbook that shows how much interest and principal you will pay each month for the duration of the loan. The following is a list of assumptions and requirements you need to consider for this assignment:

You will be making a down payment of 20% on the home (refer to Table 2.5 for loan and lease terms).

The bank will offer you a loan at an annual interest rate of 5.5% for 30 years.

Your mortgage payments will be made at the end of each month.

You must construct the amortization table so that any change in the loan variables, down payment percent, length of loan, interest rate, and so on will automatically produce new outputs for each month of the amortization table.

The amortization table must show the interest payment, principal payment, and balance remaining to be paid on the loan for every month of the loan duration. The beginning balance for the last month of the loan should be equal to the principal payment in the last month. Refer to Figure 2.29 for establishing the format for the table.

Remember to use column and/or row headings, add a title to your worksheet, and rename the worksheet tab with an appropriate label.

Include your name in the file name of the workbook.

Pleasse show work in excel! and formulas
Screenshots are greatly appreciated, thank you

Answer 1

First step is to calculate installment amount which is equal to:

New Home Cost	225000
Down payment	45000
Loan Amount	180000
Annual interest rate	5.50%
Years	30
Installment Amount	12,384.97

Apply the formula =PMT(E4,E5,E6)

As you have mentioned number of years=30,so amortization table shown is in the years

Yr	Opening Balance	Installment Amount	Interest Amount	Principal amount	Closing Balance
1	1,80,000.00	12,384.97	9,900.00	2,484.97	1,77,515.03
2	1,77,515.03	12,384.97	9,763.33	2,621.64	1,74,893.39
3	1,74,893.39	12,384.97	9,619.14	2,765.83	1,72,127.55
4	1,72,127.55	12,384.97	9,467.02	2,917.95	1,69,209.60
5	1,69,209.60	12,384.97	9,306.53	3,078.44	1,66,131.16
6	1,66,131.16	12,384.97	9,137.21	3,247.76	1,62,883.40
7	1,62,883.40	12,384.97	8,958.59	3,426.38	1,59,457.02
8	1,59,457.02	12,384.97	8,770.14	3,614.83	1,55,842.18
9	1,55,842.18	12,384.97	8,571.32	3,813.65	1,52,028.53
10	1,52,028.53	12,384.97	8,361.57	4,023.40	1,48,005.13
11	1,48,005.13	12,384.97	8,140.28	4,244.69	1,43,760.44
12	1,43,760.44	12,384.97	7,906.82	4,478.15	1,39,282.30
13	1,39,282.30	12,384.97	7,660.53	4,724.44	1,34,557.86
14	1,34,557.86	12,384.97	7,400.68	4,984.29	1,29,573.57
15	1,29,573.57	12,384.97	7,126.55	5,258.42	1,24,315.14
16	1,24,315.14	12,384.97	6,837.33	5,547.64	1,18,767.51
17	1,18,767.51	12,384.97	6,532.21	5,852.76	1,12,914.75
18	1,12,914.75	12,384.97	6,210.31	6,174.66	1,06,740.09
19	1,06,740.09	12,384.97	5,870.70	6,514.27	1,00,225.83
20	1,00,225.83	12,384.97	5,512.42	6,872.55	93,353.28
21	93,353.28	12,384.97	5,134.43	7,250.54	86,102.74
22	86,102.74	12,384.97	4,735.65	7,649.32	78,453.42
23	78,453.42	12,384.97	4,314.94	8,070.03	70,383.38
24	70,383.38	12,384.97	3,871.09	8,513.88	61,869.50
25	61,869.50	12,384.97	3,402.82	8,982.15	52,887.35
26	52,887.35	12,384.97	2,908.80	9,476.17	43,411.19
27	43,411.19	12,384.97	2,387.62	9,997.35	33,413.83
28	33,413.83	12,384.97	1,837.76	10,547.21	22,866.62
29	22,866.62	12,384.97	1,257.66	11,127.31	11,739.32
30	11,739.32	12,384.97	645.66	11,739.31	0.01