Lucinda has a 6.5% APR, compounded monthly loan for 15 years. Her taxes and insurance are $392

Fantastic news! We've Found the answer you've been seeking!

Question:

Lucinda has a 6.5% APR, compounded monthly loan for 15 years. Her taxes and insurance are $392 per month. Lucinda has an estimate for a $16,000 firm, fixed price contract to remodel the house and this expense will be equally distributed over the period of her ownership. After remodeling, she estimates that she could sell the house for $150,000. Her selling expenses would be 6.5% sales commission plus $1,500.

Assignment

1. Determinemanually, by trial and error, Lucindas rate of return, if she owns the house for 6 months.Show the manual calculations, including the ball-park method.

Note: To get full credit, you must showALLhandwritten manualcalculations (including the value of the factors) of how you got the ROR in #1. (10 Points)

2. Prepare anExcelAmortization chart that shows the first six months payments. (4 points)

3. Prepare anEXCELspreadsheet to determine Lucindas rate of return if she owns the house for 6 months. (5 points)

4. Use the Excel spreadsheet to determine the ROR if Lucinda keeps the house for 6 months and the selling price is $145,500 instead of $150,000. (3 points)

5. Use the Excel spreadsheet to determine the ROR if the sales price is $150,000 and the repairs take longer than expected and Lucinda keeps the house for 12 months before selling and the remodeling contract is for 12 months instead of 6. (3 points)