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#$1$: $(5$ points$)$

The Fifth National Bank of Clinton makes a $12$ percent, $25-$year, $$40,000$ mortgage loan with annual compounding to John L$.$ sulivan tohnance a home he purchased. At the end of year $6,$ the bank needs the money and wishes to sell the loan in a $10$ percent market.

$.$ a$)$ Assuming that all the payments have been made on schedule, what is the unamortized loan balance at the end of year $6?(1$ point$)$

b$)$ Assuming no prepayment, at what price is the loan likely to sell? $(1$ point$).$

c$)$ Diamond Jjim Brady buys the loan at the end of year $6$ for $$40,000.$ Assuming that it is not prepaid, what yield $($lRR$)$ should he realize?$(1\mathrm{.}5$ points$)$

d$)$ lf Diamond Jim Brady buys the loan at the end of year $6$ for $$40,000.$ Assuming that it will be prepaid at the end of year $12,$ what yield$($lRR$)$ should he realize? $(1\mathrm{.}5$ points$)$