Homework Answers
a) The original loan has maturity (nper)=15*4=60 quarters, quarterly interest rate=6%/4=1.5%, PV=450000, PMT=?
![A 1 PV 2 nper 3 rate 4 PMT 450000 60 1.50% =PMT(B3,B2,B1,0,0) PMT(rate, nper, pv, [fv], [type])](http://img.homeworklib.com/questions/b6b2a880-08ff-11ea-8212-0f9d4ce82dee.png?x-oss-process=image/resize,w_560)
Hence, below is the amortization schedule for the first 20 quarter or 5 year:
a) Hence, at the end of 20th quarter or 5 year remaining mortgage balance of loan $341,849.63
b) The new loan amount (PV)=341849.63*1.05=$358942.11, nper=20*4=80, rate=4%/4=1%, PMT=?
![А 1 PV 2 nper 3 rate 4 PMT в C D | 358942.112 80 1 .00% |=PMT(B3,B2,B1,0,0) PMT(rate, nper, pv, [fv], [type]) 1](http://img.homeworklib.com/questions/b7bbc4e0-08ff-11ea-954a-07ac7bccdc5b.png?x-oss-process=image/resize,w_560)
Hence, Energy Max's quarterly payments will be reduced by =(11427.04-6539.51)=$4887.53
c) The proposed loan will run for more 20 year i.e. (20-10)=10 more year than the previous loan.
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