Fin 2030 - The scenario is designed to help you determine

Fin 2030   The scenario is designed to help you determine and evaluate

The scenario is designed to help you determine and evaluate the payment amount of a car loan and a mortgage, based on the assumption that your household income is $36,000 per year or $3,000 per month. Based on your income, you may spend 28% of your monthly income on housing, and 10% on a car loan. You are to put a 3% down payment on the house and a 10% down payment on the car.

Required:

Using Microsoft Excel, address the following issues:

1. What is the maximum car payment and mortgage payment you can afford with the following conditions: your monthly household income, 10% for the car payment, and 28% for the mortgage payments?

2. Assume a 10% down payment on the car and a 3% down payment on the house. Also, assume that you can get financing for the car at 7% for 60 months, and the house can be financed at 5% for 30 years. How much could you spend on the car and the house? You must submit your calculations in a Microsoft Excel document showing how answers were reached.

3. Create a complete amortization schedule for the car, using the information in questions 1 and 2.

4. Discuss the distributions of principal, interest and the balance over the life of the loan.

TUTORIAL PREVIEW

Calculation of loan amount:
For Car			For house:
Rate = 7%/ 12 =	0.583%		Rate = 5%/ 12 =	0.417%
Nper =	60		Nper = 30*12 =	360

 File name Fin2030 The scenario.xlsx File type: xlsx  PRICE:$20