Reference no: EM131599586
Scenario for Week 2: Amortization
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.
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?
2. 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.
3. Create a complete amortization schedule for the car, using the information in questions 1 and 2.
4. Discuss the distributions of principal, interest and the balance over the life of the loan.
|
What is the balance in accounts receivable at year-end
: ABC Co. has an average collection period of 90 days. Total credit sales for the year were $6,000,000. What is the balance in accounts receivable at year-end?
|
|
What is the value of shareholders equity account for firm
: What is the value of the shareholders’ equity account for this firm?
|
|
What is the correct recorded revenue figure-charity service
: Greenville Hospital’s full established rate for a certain procedure is $200, What is the correct recorded revenue figure? Charity service is:
|
|
How much in dividends did the firm pay
: On 12/31/15, Hite Industries reported retained earnings of $497,500 on its balance sheet, How much in dividends did the firm pay during 2015?
|
|
Evaluate the payment amount of car loan and mortgage
: determine and evaluate the payment amount of a car loan and a mortgage, Discuss distributions of principal, interest and balance over the life of loan.
|
|
Payments occur at the end of each time period are called
: Annuities where the payments occur at the end of each time period are called _____,
|
|
An example of a capital market security would be
: An example of a capital market security would be:
|
|
Spending to achieve better personal financial security
: What actions can help a person control spending to achieve better personal financial security?
|
|
The interest is compounded semiannually
: You just invested $25,000 in an account that pays an 9% nominal interest rate. The interest is compounded semiannually.
|