Project #43589 - Intro to Finance

Assignment 2: Quantitative Exercises and Final Project 1: Amortization

Part One: Quantitative Exercises  

  1. Determine the present value solutions to period, interest, and payments.
  2. Calculate the future value solutions for period, interest, and payments.
  3. Determine the answers relating to annuity, perpetuities, and annuity due problems.

Download the Week 2 quantitative exercises calledFIN2030_W2_A2_Template.xlsx.

Complete the assignment using this template. You may use the formulas in Microsoft Excel and/or a financial calculator. Be sure to summarize your results with embedded formulas in the spreadsheet, using the mathematical equations, or the steps taken on the financial calculator.

Deliverable:

By Saturday, October 18, 2014, submit the completed assignment using the Microsoft Excel template provided, to the W2: Assignment 2 Dropbox. Show all your calculations.

Name your document SU_FIN2030_W2_A2_part1_LastName_FirstInitial.

 

Scenario for Week 2: Amortization

The scenario is designed to help you determine and evaluate the payment amount of a car loan and a mortgage, based on the assumption that your household income is $36,000 per year or $3,000 per month.

Based on your income, you may spend 28% of your monthly income on housing, and 10% on a car loan. You are to put a 3% down payment on the house and a 10% down payment on the car.

Required:

Using Microsoft Excel, address the following issues:

    1. What is the maximum car payment and mortgage payment you can afford with the following conditions: your monthly household income, 10% for the car payment, and 28% for the mortgage payments?

 

    1. Assume a 10% down payment on the car and a 3% down payment on the house. Also, assume that you can get financing for the car at 7% for 60 months, and the house can be financed at 5% for 30 years. How much could you spend on the car and the house? You must submit your calculations in a Microsoft Excel document showing how answers were reached.

 

    1. Create a complete amortization schedule for the car, using the information in questions 1 and 2.

 

  1. Discuss the distributions of principal, interest and the balance over the life of the loan.

Deliverable:

By Saturday, October 18, 2014, submit your completed responses to this Final Project assignment to the W2: Assignment 2 Dropbox. Your submission must be in a Microsoft Excel spreadsheet. Show all your calculations, and use textboxes for the narratives.

Name your document SU_FIN2030_W2_A2_part2_LastName_FirstInitial.

Assignment 2 Grading Criteria
Maximum Points

Correctly calculated the needed responses to the TVM problems on the template.

15
Correctly determined the car and mortgage payments.
5
Correctly constructed the amortization schedule.
15
Came to the correct conclusions and implications concerning the distribution of principal and interest contained in the amortization schedule.
5
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation. 
10
Total:
50

Subject Business
Due By (Pacific Time) 10/18/2014 12:00 am
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