Instructions

Please answer the following questions by developing an Excel workbook with a worksheet $($showing your work$/$calculations$)$ for eachguestion. Highlight your answers on the spreadsheet. Your completed workbook will be turned in for this assignment.

Question#$2$: $(8$ points$)$

Jose LaGuardia takes out a $$200,000$ mortgage loan from the Bears Credit Union. The terms are $15$ years, $9$ percent, and annual payments. The credit union decides to sell the loan at the end of Year $4$ in a $12$ percent market.

a$)$ What is the loan balance at the end of year $4?(0\mathrm{.}5$ points$)$

b$)$ What amount will the credit union realize, assuming no prepayment is expected on the loan? $(1$ point$).$

c$)$What is the dollar and percent discount for the loan in part b$?(1$ point$)$

d$)$ Assuming prepayment at the end of year $10$ and sale of the loan at the end of year $4,$ at what price is the loan likely to sell? $(2$ points.

e$)$ lrena James buys the loan at the end of year $4$ for $$140\mathrm{.}000.$ Assuming that it is not prepaid. what yield lRR$)$ should she realize? $(1\mathrm{.}5$ points$)?$

f$)$ lrena James buys the loan at the end of year $4$ for $$140,000.$ Asuming that it wil be prepaid at the end of year $10,$ what yield $($lRR$)$should be realized? $(2$ points$)$