8) Using excel, build a monthly amortization table for a 30-year mortgage on a $

Question

8) Using excel, build a monthly amortization table for a 30-year mortgage on a $350,000 home, no money down. Use 7% as the yearly interest on the loan.

9) Using the amortization table you built for Question 8, answer the following questions.

a. How much money will you still owe on the loan after making one full year of payments?

b. How much money will you still owe on the loan after making 10 full years of payments?

c. If you want to refinance after 15 years of making payments, how much financing would you need to secure from your bank to do so?

d. How much money can you expect to pay in interests alone during the 30 year life of the mortgage?  

Explanation / Answer

First Find the monthly emi

which can be found in excel as follows =PMT(7%/12,360,-350000,0,0) =2328.56

Each month Interest = Principal outstanding * 7%/12 =

Principal = EMI - Interest

Rest of table can be calculated similiarily

Date Interest Principal Balance 1 2,042 287 349,713 2 2,040 289 349,425 3 2,038 290 349,134 4 2,037 292 348,842 5 2,035 294 348,549 6 2,033 295 348,253 7 12,225 1,747 348,253 8 2,031 297 347,956 9 2,030 299 347,657 10 2,028 301 347,357 11 2,026 302 347,055 12 2,024 304 346,751 13 2,023 306 346,445 14 2,021 308 346,137 15 2,019 309 345,828 16 2,017 311 345,516 17 2,016 313 345,203 18 2,014 315 344,888 19 2,012 317 344,572

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