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Lab Created By: Dand Lippman, Author of Math And Society The goal of this activity is to use Microsoft Excel to find the monthly payment for a loan and then create an amortization schedule. The spreadsheet should be versatile in that you should be able to change input variables and have the spreadsheet recalculate. An example is shown below 1 Cost 2 Down payment 3 Balance B1-B2 Interest (as a decimal) 5 Term (months) PMT(B4/12,85,-B3,0,0 Monthly Pmt Interest 10 Period 12 13 Principal Balance 83 SB$7-B1 D11-C1 2 SB$4/12 D11 -SB$4/12 D12 3 The monthly payment formula is -pMTtrate as a decimal, number of payment period, Present value (negative loan amount), Future Value (0), Payment at end of period (0)) You have decided to buy a house. The house will cost $169,000. You have saved enough for a down payment of $30,000. The interest rate for the mortgage is 5.9%, regar dess of the term. You arent sure if you want a 15-year mortgage or a 30-year mortgage. To decide, you must consider whether the payments are affordable. A monthly mortgage payment should be less than 25% of your monthly income. 3. Complete the table below that shows the payment number, interest, principal and balance for the 180th payment of both the 15 and 30 year mortgages. Payment number Interest Principal Balance 15 year mortgage 180 30 year mortgage 180 Complete the short answer question in 500 characters using complete sentences: 4. Take a picture our your excel sheet at the top of your sheet and attach it here. (The easy way to do this on a PC is to press the PrintScreen Key and then paste) Type answer here 5 Write a short paragraph on how mortgage payments are applied. Type answer here Change the interest rate from S 9% to 6.9% (sta using the above purchase price of $169,000, down payment of $30,000, and the original 30 year mortgage). Citing specific numerical values, discuss how the change in the interest rate affects the total cost of the mortgage. Type answer here

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