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Amortization and Income Statements

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1. To buy a new house you take out a 25 year mortgage for $300,000. What will your monthly interest rate payments be if the interest rate on your mortgage is 8 percent?
rate (i) =
number of periods (n)=
present value (PV) =$300,000
future value (FV) =$0
type (0 = at end of period) =0
monthly mortgage payment=

2. Prepare a Pro Forma Income Statement
Net Sales =$2,938 COGS=$1,598 SG&A=$475 Depreciation=45 Interest Exp=$32 Tax=15%

Show in Excel the following:
Net Sales
Cost Of Goods Sold
Gross Profit
Selling & Admin Exp
Interest Exp
Income Before Taxes
Income Taxes
Net Profit

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Solution Summary

This response calculates the monthly interest rate payments of a mortgage and provides instructions on how to prepare a pro forma income statement.

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rate (i) = 8%
number of periods (n) = 25
present value (PV) = $300,000
future value (FV) = $0
type (0 = at ...

Solution provided by:
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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