Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a...
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Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who is alsoa Stevens alum, walks in and applies for a $600,000 loan to buy a starter home in Hoboken. The standard terms your bank have been offering to previous customers are as followed, Contract A: a 15-year fixed rate loan, with an annual rate of 45% and with fixed monthly installment. 1. (10 pts), (a) Calculate the monthly payment, denote it as XA using mathematical formulas. (b) Create an Excel spreadsheet and calculate how your interest payments, principal payments, and the outstanding loan balances changes over time for Contract A (You do NOT need to print the entire excel sheet; just few cells from the beginning and end would be enough. However, you should explain your approach.)
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