Question: Is one question with subparts provide answers MATLAB code, Graphs, SIMULINK SCHEMATICS AND GRAPHS Amortization is the process by which a loan is repaid by
Amortization is the process by which a loan is repaid by a sequence of periodic payments, each of which is part payment of interest and part payment to reduce the outstanding principal. Let p(n) represent the outstanding principal after the nth payment g(n). Suppose that interest charges compound at the rate r per payment period. The formulation of our model here is based on the fact that the outstanding principal p(n+1) after the (n+1) st payment is equal to the outstanding principal p(n) after the nth payment plus the interest rp(n) incurred during the (n+1) st period minus the nth payment g(n). 1) Write the first-order difference equation and solve for p(n), assuming initial debt p(0)= p0. 2) Solve: a) Constant monthly payment for 30 -year, $300,000 mortgage with 5.47% APR (Note: interest = APR/12) b) Constant monthly payment for 30-year, $300,000 mortgage with 5.00% APR (Note: interest = APR/12) 3) Often paying out additional bank fees upfront can reduce the APR, is it worth paying addiotnal $950 upfront to lower APR from 5.47% to 5.00% ? 4) What is the overall payout (principal and interest) difference after 30 years between two scenarios? 5) Plot p(n) for both cases over 30 years. Use matlab and simulink to model the two scenarios. Submit, 1) answer(s), 2) Matlab code, 3) graph(s), 4) simulink schematic, 5) simulink graphs
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