Group Activity 12 Loans

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Learning Goals for this Activity

1. You will be able to calculate loan payments using the PMT function in Excel.
2. You will be able to calculate the total amount paid, the total interest paid and the total principal paid on the loan.

To use the PMT Function...
Choose the Function Wizard button then Financial in the left column and PMT in the right column. A screen will appear and you will be prompted to enter values.

Rate is the loan interest rate. (Monthly amount)
Nper is the number of payments. (Total number of payments to be made)
Pv is the amount of the loan. (No change - just the amount of the loan)
Fv is the future value of the loan and is not filled in.(Leave blank)
Type is indicating whether the payment is made at the beginning or the end of the month. Use 0 for this problem.(Just enter 0 or leave blank)

Amortization Table

1. You have graduated from DePaul and decide to buy a condominium in Chicago for $239,000.   The one bedroom, one bathroom condo is located in Lincoln Park.  Assuming you need a loan for $227,050 what will your payments be assuming a 30 years mortgage at 6%?

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2.  What is the total amount you end up paying including principal and interest?

3.  For comparison purposes, you also look at a 15 year mortgage at 5.5% for 15 years.  What is your monthly payment?

4.  What is the total amount you end up paying including principal and interest if you decide on the 15 year mortgage?