This project requires you to create an amortization schedule for two types of loans, a fully amortizing
Question:
This project requires you to create an amortization schedule for two types of loans, a fully amortizing constant payment mortgage (CPM) loan, and a constant amortizing (CAM) loan. In your report, compare the amortization schedule of the CPM and CAM loans (How are they similar? How are they different? Which would you prefer and why?)
Part 1: Monthly Payment
Consider a $10,000 loan made at a 12 percent annual (nominal) rate of interest for 3 years.
A) Calculate the constant monthly mortgage payments on this loan, assuming it is to be fully amortized at the end of 3 years. Be sure to use the excel PMT function to calculate the monthly payment
see https://support.office.com/en-us/article/PMT-function-0214da64-9a63-4996- bc20-214433fa6441)
Part 2: CPM Loan
Consider a $10,000 fully amortizing CPM loan made at a 12 percent annual (nominal) rate of interest for 3 years.
B) Fill in the amortization schedule for each month (calculate or fill in the values of the beginning loan balance, monthly payment, interest, amortization, and ending loan balance). Be sure to show
calculations if needed (i.e. do not simply type in values but reference other cells to compute the calculations)
Part 3: CAM Loan
Consider a $10,000 CAM loan made at a 12 percent annual (nominal) rate of interest for 3 years.
C) Fill in the amortization schedule for each month (calculate or fill in the values of the beginning loan balance, monthly payment, interest, amortization, and ending loan balance). Be sure to show calculations if needed (i.e. do not simply type in values but reference other cells to compute the calculations)
Excel Note: If you want to lock in a cell reference, use the $ symbol. For example, if you would like to keep
the value of cell A5 constant for use in a formula, reference it as $A$5. See https://support.office.com/enus/article/Switch-between-relative-absolute-and-mixed-references-dfec08cd-ae65-4f56-839e5f0d8d0baca9
Part 1: A) Monthly payment
Loan amount = |
nominal rate = |
number of yrs = |
periodic rate = |
number of periods= Monthly payment = |
Part 2: B) Amortization scheduled CPM
the monthly beginning loan balance | monthly payment | Intrest | Amortization | ending loan balance |
Part 3. C ) Amortization schedule CAM
monthly beginning loan balance | Intrest | Amortization | Monthly payment | ending loan balance |
Business Math
ISBN: 978-0133011203
10th edition
Authors: Cheryl Cleaves, Margie Hobbs, Jeffrey Noble