RES 334 Week 2 Calculate Fixed and Adjustable Rate Mortgages -
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Calculate Fixed and Adjustable Rate Mortgages
Calculate a fixed rate mortgage: Chapter 4 Problem #5: A fully amortizing mortgage loan is made for $100,000 at 6% interest for 20 years.
Calculate an adjustable rate mortgage: Chapter 5 Problem #4: An ARM for $100,000 is made at the time when the expected start rate is 5%. The loan will be made with the teaser rate of 2% for the first year, after which the rate will be reset. The loan is fully amortizing, has maturity of 25 years, and payments will be made monthly.
You are expected to provide a detailed solution to the above referenced problems. Since this assignment is based on calculations only an Excel is required. Make sure to complete all work in your spreadsheet for full credit.