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

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

Step by Step Solution

★★★★★

3.46 Rating (153 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Part 1 Loan 10000 Interest Rate 12 No of Yrs 3 yrs Using the PMT function in excel we get Monthly Rate 1212 1 NPER 312 36 PV 10000 The constant monthly mortgage payments on this loan is 33214 Part 2 L... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The Stand-Alone Project requires you to perform an in-depth strategic audit of American Airlines, Inc. These past several years have been troubling times for the airline industry. Jet fuel prices...

You have applied for a job with a local bank. As part of its evaluation process, you must take an examination on time value of money analysis covering the following questions: a. Draw time lines for...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Abandonment Decision for some projects, it may be advantageous to terminate the project early. For example, if a project is losing money, you might be able to reduce your losses by scrapping out the...

Corner Brook Furniture Co. makes bookstands and expects sales and collections for the first three months of 2011 to be as follows: The December 31, 2010, balance sheet revealed the following selected...

Jerry Posey started a business by issuing a $50,000 face value note to State National Bank on January 1, 2010. The note had a 5 percent annual rate of interest and a 10-year term. Payments of $6,475...

The monthly payments on both graduated-payment loans and growing-equity loans increase over time. Despite this similarity, the two types of loans have different purposes. What is the motivation...

Calculating Annuities Due As discussed in the text, an ordinary annuity assumes equal payments at the end of each period over the life of the annuity. An annuity due is the same thing except the...

The Kellogg Company is considering the following investment project and has estimated all cost and revenues in constant dollars. The project requires the purchase of a $9,000 asset, which will be...

Darrington and Darling borrowed $100,000 from Commercial Financing to finance the purchase of fixed assets. The loan contract provides for a 12 percent annual interest rate and states that the...

Menlo Company distributes a single product. The company's sales and expenses for last month follow: Total Per Unit Sales $ 616,000 $ 40 Variable expenses 28 431,200 184,800 Contribution margin $ 12...

What is a key concept in research?

Planning and budgeting are activities that help a healthcare orgainization Group of answer choices save resources and evaluate future needs plan for, use, and dispose of resources to maximize...

Ever since the day she took her first economics class in high school, Lydia wondered about the financial practices of her parents. They worked very hard to earn enough money to live a comfortable...

A daily number lottery chooses three balls numbered 0 to 9. The probability of winning the lottery is 1/1000. Let x be the number of times you play the lottery before winning the first time. (a) Find...

An increasing number of Americans are moving to a warmer climate when they retire. To take advantage of this trend, Sunny Skies Unlimited is undertaking a major real estate development project. The...

A real estate development firm, Peterson and Johnson, is considering five possible development projects. The following table shows the estimated long-run profit ( net present value ) that each...

A stock has an expected return of 12.4 percent, its beta is 1.17, and the risk-free rate is 4.2 percent. What must the expected return on the market be?

a 1 pts Difference threshold and just noticeable difference are NOT the same thing. O True O False Question 24 1 pts Nerve receptors in the spinal cord lead to specific areas of the brain related to...

I need help with this entire project ASAP! All instructions are in the document CAPITAL BUDGETING CASE STUDY ANALYSIS ACME Inc. is a multinational conglomerate corporation providing a wide range of...

Hii i need help with this four parts questions. thankk you. second part third four Check my work Required information Problem 24-2A Analysis and computation of payback period, accounting rate of...

Please help us complete data for only project A & B. CAPITAL BUDGETING CASE STUDY ANALYSIS ACME Inc. is a multinational conglomerate corporation providing a wide range of goods and services to its...

OPERATIONS MANAGEMENT ASSIGNMENT 6 1 Human resources, project management and operations management are all equally vital to a business's success. Each of these focuses on different areas of the...

Show work 1. Ames Co. is planning an investment project of a five-year con- tract to provide component parts for a large manufacturer. The project has the following requirements and annual cash...

Thank u guys:) This is the reference pages but the questions are the last 3 pictures . . . . Craft - Mason Wage rate VET $29.00 Hours worked 50 hours per week for 20 weeks and 40 hours per week for...