50.1K

Verified Solution

Link Copied!

• Apply compound interest formulas to solve basic financial problems
• Formulas are to be entered in word by selecting insert, equation, and then using the equation pallatte in MS word to build the formulas
• .

CASE 120 Business and Property Spreadsheet Project The spreadsheet calculations should be set up in a systematic manner. Your set-up should contain a list of the given values, and as many calculated values as possible. Make your spreadsheet as 'active'as possible by using cell references (so that if one value is changed, subsequent calculations will automatically update). Use absolute cell references in special situations. Bob and Angelique Mackenzie bought a property valued at $84,000 for $15,000 down with the balance amortized over 20 years. The terms of the mortgage require equal payments at the end of each month. Interest on the mortgage is 3.4% compounded semi-annually and the mortgage is renewable after five years. a. What is the size of the monthly payment? b. Prepare an amortization schedule for the first five-year term. Make sure your payments are rounded to the nearest cent. c. What is the cost of financing the debt during the first five-year term? d. If the mortgage is renewed for a further five years at 4.2% compounded semi-annually, what will be the size of each monthly payment? The Mackenzie's also bought a business for $90,000. They borrowed the money to buy the business at 6.9% compounded semi-annually and are to repay the debt by making quarterly payments of $3645. e. How many payments are required to repay the loan? f. What is the term of the loan in years and months? g. Prepare a complete amortization schedule for the loan. Express totals at the bottom as currency. h. What is the principal reduction in the year? i. What is the total cost of financing the debt? j. If Bob and Angelique make a lump sum payment of $10,000 at the end of the fourth year, by how much is the amortization period shortened? k. How much interest do they save by making the lump sum payment? 1. If Bob and Angelique had made the lump sum payment at the end of the second year instead of the end of the fourth year, how much more money could they save

Answer & Explanation Solved by verified expert

See Answer