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Home Loan Amortization; Goal Seeking, Creating Macros, and Creating Summary Information for Management. Goals of this...

Home Loan Amortization; Goal Seeking, Creating Macros, and Creating Summary Information for Management.

Goals of this Project:

1. Freeze Panes to consistently display titles of Loan Amortization Table 2. Learn how to perform Goal Seeking. You will put in three different monthly payment amounts and see the effect on the number of periods. For example, for an 8 percent, 2 point loan, 360 periods, do not pay the points up front, and borrow $400,000, answer the following questions: How many years will it take to pay off the loan if you pay an additional $750 on the Principal? How many years will it take to pay off the loan if you pay an additional $1500 on the Principal? How many years will it take to pay off the loan if you double the monthly payment?

Expert Solution

In case of no down payment :

Loan Amount : $400,000

Interest : 8%

Period : 360 months or 30 yrs

Hence the payment of EMI = Interest + Principal

EMI = In excel use function pmt(rate,no. of yrs,loan amt *-1) or P = (Pv*R) / [1 - (1 + R)^(-n)] = $2935

Interest = ($400,000 * 8%) / 12 = $2667

Principal = EMI - Interest = $2667 - $2935 = $268

How many years will it take to pay off the loan if you pay an additional $750 on the Principal?

If $750 is added to EMI then it will take 17yrs 2 months to pay off the the loan.

How many years will it take to pay off the loan if you pay an additional $1500 on the Principal?

If $1500 is added to EMI then it will take 11 yrs 5 months to pay off the the loan.

How many years will it take to pay off the loan if you pay double the monthly payment

If $2935 is added to EMI then it will take 7 yrs 6 months to pay off the the loan.

YEAR	DATE	PAYMENT	INTEREST	PRINCIPAL	ENDING BALANCE
1	2019	ORIGINAL $750 $1500 $2935	$31,602 $31,542 $31,204 $30,559	$3,619 $12,679 $22,016 $39,882	$393,040 $387,321 $377,984 $360,118
2	2020	ORIGINAL $750 $1500 $2935	$31,302 $30,489 $29,377 $27,249	$3,919 $13,731 $23,844 $43,192	$389,121 $373,590 $354,140 $316,926
3	2021	ORIGINAL $750 $1500 $2935	$30,976 $29,350 $27,398 $23,664	$4,244 $14,871 $25,823 $46,777	$384,876 $358,719 $328,317 $46,777
4	2022	ORIGINAL $750 $1500 $2935	$30,624 $28,115 $25,255 $19,781	$4,597 $16,105 $27,966 $50,660	$380,279 $342,614 $300,351 $219,489
5	2023	ORIGINAL $750 $1500 $2935	$30,242 $26,779 $22,934 $15,576	$4,978 $17,442 $30,287 $54,864	$375,301 $325,172 $270,064 $164,625
6	2024	ORIGINAL $750 $1500 $2935	$29,829 $25,331 $20,420 $11,023	$5,391 $18,890 $32,801 $59,418	$369,910 $306,282 $237,263 $105,207
7	2025	ORIGINAL $750 $1500 $2935	$29,382 $23,763 $17,697 $6,091	$5,839 $20,457 $35,523 $64,350	$364,071 $285,825 $201,740 $40,857
8	2026	ORIGINAL $750 $1500 $2935	$28,897 $22,065 $14,749 $1,120	$6,324 $22,155 $38,472 $40,857	$357,747 $263,669 $163,268 $0
9	2027	ORIGINAL $750 $1500 $2935	$28,372 $20,226 $11,556 -	$6,848 $23,994 $41,665 -	$350,899 $239,675 $121,603 -
10	2028	ORIGINAL $750 $1500	$27,804 $18,235 $8,098	$7,417 $25,986 $45,123	$343,482 $213,689 $76,480
11	2029	ORIGINAL $750 $1500	$27,188 $16,078 $4,352	$8,032 $28,143 $48,868	$335,450 $185,547 $27,611
12	2030	ORIGINAL $750 $1500	$26,522 $13,742 $687	$8,699 $30,478 $27,611	$326,750 $155,068 $0
13	2031	ORIGINAL $750 $1500	$25,800 $11,213	$9,421 $33,008	$317,329 $122,060
14	2032	ORIGINAL $750 $1500	$25,018 $8,473	$10,203 $35,748	$307,126 $86,312
15	2033	ORIGINAL $750 $1500	$24,171 $5,506	$11,050 $38,715	$296,076 $47,598
16	2034	ORIGINAL $750 $1500	$23,254 $2,293	$11,967 $41,928	$284,109 $5,669
17	2035	ORIGINAL $750 $1500	$22,260 $51	$12,960 $5,669	$271,149 $0
18	2036	ORIGINAL $750 $1500	$21,185	$14,036	$257,113
19	2037	ORIGINAL $750 $1500	$20,020	$15,201	$241,912
20	2038	ORIGINAL $750 $1500	$18,758	$16,463	$225,449
21	2039	ORIGINAL $750 $1500	$17,392	$17,829	$207,620
22	2040	ORIGINAL $750 $1500	$15,912	$19,309	$188,311
23	2041	ORIGINAL $750 $1500	$14,309	$20,912	$167,400
24	2042	ORIGINAL $750 $1500	$12,574	$22,647	$144,752
25	2043	ORIGINAL $750 $1500	$10,694	$24,527	$120,226
26	2044	ORIGINAL $750 $1500	$8,658	$26,563	$93,663
27	2045	ORIGINAL $750 $1500	$6,453	$28,767	$64,896
28	2046	ORIGINAL $750 $1500	$4,066	$31,155	$33,741
29	2047	ORIGINAL $750 $1500	$1,480	$33,741	$0
30	2048	ORIGINAL $750 $1500

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