Create the spreadsheet models shown in Figures 9.3 and 9.4.
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 9.3?
b. For the original model in Figure 9.3, 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 9.4, 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?

Figure 9.3

Figure 9.4

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File Paste Clipboard F R14 2 345 879 9 10 11 12 13 BHLLI898 14 15 16 17 18 19 Home 20 A Insert Calibri 11 BIU. 180 - Page Layout Font B Lx A A C Formulas Loan Amount Interest Rate Number of Years Number of Months Interest Rate/Month 11 Monthly Loan Payment HSheet1 Sheet2 Sheet3 B === D Fig10.3 Static model ex simple loan Microsoft Excel Review View Data Simple Loan Calculation Model in Excel Alignment $150,000 8.00% 30 360 0.67% General $% $1,100.65 Number 00.0 +0.00 Conditional Format Cell Formatting as Table Styles Styles -E8*12 Excel Spreadsheet Static Model Example of a Simple Loan M G H =E7/12 =PMT (E11, E10, E6, 0) 11 Insert- Delete- Format Cells Σ AT A Sort & Find & Filter Select Editing K < 04 |>