Helpplease. Business n Finance..(Excel users)?
Consider the following scenario: John buys a house for $150,000 and takes out a five year adjustable rate mortgage with a beginning rate of 6%. He makes annual payments rather than monthly payments.
Unfortunately for John, interest rates go up by 1% for each of the five years of his loan (Year 1 is 6%, Year 2 is 7%, Year 3 is 8%, Year 4 is 9%, Year 5 is 10%).
Calculate the amount of John’s payment over the life of his loan. Compare these findings if he would have taken out a fix rate loan for the same period at 7.5%. Which do you think is the better deal?
ok that is my assignment.. Any one know what excel formulas i could use. My reading material is not detailed enough for my to perform this byhand.
There are template in your excel for calculating these… just need to punch in the numbers.
Fix Rate vs Adjustable Rate
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