2. Create the spreadsheet models shown in Figures 4.3 and 4.4.

a. What is the effect of a change in the interest rate from 8 percent to 10 percent in the spreadsheet model shown in Figure 4.3?

b. For the original model in Figure 4.3, what interest rate is required to decrease the monthly payments by 20 percent? What change in the loan amount would have the same effect?

c. In the spreadsheet shown in Figure 4.4, what is the effect of a prepayment of $200 per month? What prepayment would be necessary to pay off the loan in 25 years instead of 30 years?