*Scenario:* You are purchasing a house costing $100,000; you put 20% down
in cash and finance the rest at 7.25% payable monthly for 30 years. Build a
payment
schedule for this loan following the handout as a guide.

What is the principal for this loan? | |

What is the adjusted rate = rate divided by the number of times compounding? | |

What is the term for this loan? | |

What formula do you use for the first payment? | |

What formula do you use for the interest on the first payment? | |

What formula do you use for the principal on the first payment? | |

What are the monthly payments on this loan? | |

How much will you pay over the life of the loan (including the down payment)? | |

How much of that is interest? |

A1 | B | C | D | E | F |

2 | cost= | USE FORMULAS IN F3,F4,F5,F9,C10,D10,E10,F10. | |||

3 | %down= | borrowed= | |||

4 | # pmts= | adj rate= | |||

5 | annual rate= | pmt= | |||

6 | pmts/yr= | total paid | |||

7 | total interest | ||||

8 | PMT # | PMT AMT | INT | PRINC | BAL |

9 | 0 | ||||

10 | 1 | ||||

11 | 2 | ||||

12 | 3 |

Last Updated on 9/14/98

By Sarah J. Greenwald

What do the first 3 payments look like?

Payment # | Payment | Interest | Princial | Balance |
---|---|---|---|---|

0 | 0 | 0 | 0 | |

1 | ||||

2 | ||||

3 | ||||

What are the 1,2 and 5 year payoff figures?

1 Year | 2 Year | 5 Year | |
---|---|---|---|

Payoff |

If the rate is increased by .5%, what are the monthly payments? | |

How much will you pay over the life of the loan now? | |

How much of the total is interest? |

What are the 1,2 and 5 year payoff figures?

1 Year | 2 Year | 5 Year | |
---|---|---|---|

Payoff |

Change the interest rate back to 7.25%.

If the down payment is increased by 5%, what are the monthly payments? | |

How much will you pay over the life if the loan now? | |

How much of the total is interest? |

What are the 1,2 and 5 year payoff figures?

1 Year | 2 Year | 5 Year | |
---|---|---|---|

Payoff |

Change the down payment back to 20%.

If you can manage to pay an extra $100.00 per month, when will you make your last payment? | |

What are the monthly payments? | |

How much will you pay over the life of the loan now? | |

How much of the total is interest? |

What are the 1,2 and 5 year payoff figures?

1 Year | 2 Year | 5 Year | |
---|---|---|---|

Payoff |