Prepare an amortization schedule

Assignment Help Financial Management

Reference no: EM131537180

You may use your financial calculator or excel for calculations but be sure to show your work (i.e. rate, periods, payments, etc.). For the amortization schedules be sure to print the schedule so all columns fit on one page. For amortization schedules required for question 4 d. and f. only include the first and last pages of each of the schedules.

Jacoby Brissett is interested in buying a waterfront vacation home and has saved $100,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 12 months. Jacoby Brissett wants to make the purchase 18 months from today and wants to have $400,000 saved up for the down payment.

a) What is the amount of each of the additional payments he must make for his plan to work out? Assume Jacoby can earn 4% annual return in his investment account.

b) Prepare an amortization schedule proving the answer you computed in a. is correct.

c) If Jacoby takes out a 30-year, $800,000 mortgage at 4%, what will his mortgage payments be?

d) Prepare an amortization schedule to prove that your answer is right and his mortgage will be paid off in 30 years.

e) Assume he pays an additional $500 towards his mortgage each month. How much sooner will he be able to pay off her mortgage?

f) Prepare an amortization schedule proving your answer in e.

Reference no: EM131537180

Questions Cloud

Importance of present and future values : Critically reflect on the importance of present and future values. What factors must be considered when calculating present and future values?

What is the equilibrium market forecast : What is the equilibrium market forecast for 1-year rates 1 year from now?

What type of power is giant grocery retailer exhibiting : Which of the following is defined to be an exchange between a firm and its customers? What type of power is Giant Grocery Retailer exhibiting?

Calculate the required rate of return : 1. Calculate the required rate of return using the Capital Asset Pricing Model (CAPM).

Prepare an amortization schedule : Prepare an amortization schedule proving the answer you computed in a. is correct.

Why is a memorandum used as the source document : What journal is used to record transactions that cannot be recorded in special journals?

What are potential problems in the measurement of eva : Calculate the EVA for both divisions. What are the potential problems in the measurement of EVA and using EVA to compare these two divisions?

List arguments both for and against a proposal : The primary system of measurement in the United States is the customary system. Among the units of measurement in the customary system are inches, feet.

Expected return on the shares of the law : If the interest rate on Treasury bills is 5% and the expected return on the market portfolio is 20%, what is the expected return on the shares of the law.

User Account

All Pages