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You are planning to buy a 3 bedroom house in Oshawa that has a price of S950,000. One of the local banks has offered you a mortgage at a quoted rate of 4.00% per year. Interest will be compounded semi-annually. The bank has indicated that they will require a down payment of $300,000. The bank is prepared to lend you the remainder of the purchase price of the house. The amortization period will be 25 years and the term of the mortgage will be 3 years. You are going to make monthly payments on your mortgage. Therefore, you will make 12 payments per year, each at the end of the month. You have heard from your friend who has just completed the Introduction to Finance course, that by making additional payments on your mortgage during the initial term of the mortgage you can reduce the total amount of interest you pay over the entire life of the mortgage. Your friend has shown you a sample amortization schedule template (below). Sample Mortgage Schedule Prepare a mortgage amortization schedule to illustrate how the mortgage will be repaid over the next 25 years and calculate the following: What is the amount of your monthly payment? How much will you pay in total for your mortgage over the life of your mortgage? What is total interest that will be paid over the life of your mortgage? How much principal will you have paid off during the initial term of your mortgage? Use the amortization table to determine the first payment where the interest portion of the payment is less than 50% of the total payment. Identify the payment number where this occurs. Print the amortization schedule separately using the following instructions: Printing Instructions: Do NOT print the entire mortgage schedule. Hide the rows in between and print ONLY the first 10 rows and the last 10 rows of the mortgage schedule. Assuming that you decide to make an additional monthly payment of S300 during the term of your mortgage, how much less interest will you pay over the entire life of your mortgage? Assume the extra monthly payment only occurs during the initial term of your mortgage

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