amortization Project 2- Amortization Schedule Project Scope This project focuses
ID: 3367972 • Letter: A
Question
amortization Project 2- Amortization Schedule Project Scope This project focuses on the various aspects of building and analyzing an amortization schedule for retiring a loan. The object is for the student to demonstrate their understanding of the Mathematics of Finance equations and their skills using Microsoft Excel for creating business reports. The content of the analysis is a computation of the payments and interest over time arising from the acquisition of a loan. Special emphasis should be made to understand the mathematical relationship that exists in regards to the analysis of an amortized loan with consideration given to the balance, payment, interest, and final payment, observing the effects of changing interest rates and terms of the loan. Model inputs: Principal $100,000.00 Periods to show on amortization schedule: Interest: 7% Beginning Period Term Periods 12 per year Outputs: Payment $?????.?? Final Payment $????7.7 20years Ending Period 240 Partial Amortization Schedule Beginning period Ending Balance Payment Interest Principal Balance $100,000.00 s77.27 $?2.7 $2.7 $?772.?? 240 $?777.??Explanation / Answer
1. USING EXCEL, the formula ppmt[=ABS(PPMT($G$6,D10,$I$5,100000,0))]
and IPMT[=ABS(IPMT($G$6,D10,$I$5,100000,0))] is used
2. principal increase on moving downwards and interest decrease on moving downwards.
3. Total principal =$100,000
Total Interest= $86071.74
Total payment =$186071.74
Periodic Payment=$775.30
4.
Total principal =$250,000
Total Interest= $356346.67
Total payment =$606346.67
Periodic Payment=$1684.30
Begging balance of 12th period=$247734.40
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