Scenario for Week 2: Amortization - 32800

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NewYears1969

NewYears1969

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Price: $10
  • From: Business, Marketing
  • Due on: Fri 22 Nov, 2013 (08:38am)
  • Asked on: Fri 22 Nov, 2013
  • Due date has passed, but you can still Post Solution.
Description

The scenario is designed to help you determine and evaluate the payment amount of a car loan and a mortgage, based on the assumption that your household income is $36,000 per year or $3,000 per month.

Based on your income, you may spend 28% of your monthly income on housing, and 10% on a car loan. You are to put a 3% down payment on the house and a 10% down payment on the car.

Required:

Using Microsoft Excel, address the following issues:

    1. What is the maximum car payment and mortgage payment you can afford with the following conditions: your monthly household income, 10% for the car payment, and 28% for the mortgage payments?

 

    1. Assume a 10% down payment on the car and a 3% down payment on the house. Also, assume that you can get financing for the car at 7% for 60 months, and the house can be financed at 5% for 30 years. How much could you spend on the car and the house? You must submit your calculations in a Microsoft Excel document showing how answers were reached.

 

    1. Create a complete amortization schedule for the car, using the information in questions 1 and 2.

 

  1. Discuss the distributions of principal, interest and the balance over the life of the loan.

Deliverable:

By Tuesday, November 26, 2013, submit your completed responses to this Final Project assignment to the W2: Assignment 2 Dropbox. Your submission must be in a Microsoft Excel spreadsheet. Show all your calculations, and use textboxes for the narratives.

Name your document SU_FIN2030_W2_A2_part2_LastName_FirstInitial.

Assignment 2 Grading Criteria
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2 Solution for Scenario for Week 2: Amortization
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Scenario for Week 2: Amortization (detailed solution in excel sheet)
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