BMAT 230 Lisa's Mortgage Repayment Option 1 Questions: 1. Lisa's mortgage is up for renewal. There...

Transcribed Image Text:

BMAT 230 Lisa's Mortgage Repayment Option 1 Questions: 1. Lisa's mortgage is up for renewal. There is currently 15 years and 6 months remaining on her $271,500 mortgage. Interest on the mortgage is 4.79% compounded semi-annually and the mortgage is renewable after five years. a. What is the size of each monthly payment? b. Prepare an amortization schedule for the first five-year term. Make sure your payment is rounded to the nearest cent. Express totals at the bottom of each column as currency. c. What is the cost of the debt for the first five-year term? d. If the mortgage is renewed for a further five years at 6.35% compounded semi-annually, what will be the size of the monthly payment? 2. Lisa would like to repay her mortgage more quickly by increasing her monthly payment. a. If Lisa increases her payment by rounding it to the next $250, how many payments will be required. to repay the loan? Use the roundup function to calculate the new payment. To round up to a specific amount (like the $250 here) one option is to use the ROUNDUP function. I typically specify the rounding amount and call it the "bundle". Then use ROUNDUP(payment amount/bundle,0)*bundle. The,0 means no decimals. By using this function, you can round your payments to any bundle amount: $100, $250, $50. b. What is the term of the loan in years and months? By how many months is the amortization period shortened? c. Prepare an amortization schedule for the first five-year term. Make sure your payment is rounded to the nearest cent. Express totals at the bottom of each column as currency. d. What is the total cost of financing the debt for this five-year term? e. How much interest can Lisa save in the first five years if she rounds her payment up to the next $250 instead of making the original payment? BMAT 230 Lisa's Mortgage Repayment Option 1 Questions: 1. Lisa's mortgage is up for renewal. There is currently 15 years and 6 months remaining on her $271,500 mortgage. Interest on the mortgage is 4.79% compounded semi-annually and the mortgage is renewable after five years. a. What is the size of each monthly payment? b. Prepare an amortization schedule for the first five-year term. Make sure your payment is rounded to the nearest cent. Express totals at the bottom of each column as currency. c. What is the cost of the debt for the first five-year term? d. If the mortgage is renewed for a further five years at 6.35% compounded semi-annually, what will be the size of the monthly payment? 2. Lisa would like to repay her mortgage more quickly by increasing her monthly payment. a. If Lisa increases her payment by rounding it to the next $250, how many payments will be required. to repay the loan? Use the roundup function to calculate the new payment. To round up to a specific amount (like the $250 here) one option is to use the ROUNDUP function. I typically specify the rounding amount and call it the "bundle". Then use ROUNDUP(payment amount/bundle,0)*bundle. The,0 means no decimals. By using this function, you can round your payments to any bundle amount: $100, $250, $50. b. What is the term of the loan in years and months? By how many months is the amortization period shortened? c. Prepare an amortization schedule for the first five-year term. Make sure your payment is rounded to the nearest cent. Express totals at the bottom of each column as currency. d. What is the total cost of financing the debt for this five-year term? e. How much interest can Lisa save in the first five years if she rounds her payment up to the next $250 instead of making the original payment?