Mini-Project 1: Mortgage Loan Analysis: Mr. and Mrs. Smith plan to buy a house in Los Angeles in October, 2010. The purchase price of the house is $580,000. They plan to pay 20% down payment and borrow the remaining 80% from ABC Bank with a 15-year, 4% fixed-rate mortgage loan. They are expected to pay an equal MONTHLY payment starting from November 1, 2010 for a total of 15 years.
(1) Calculate the required monthly payment for the Johnsons.
(2) Construct a 2010-2011 amortization table till the end of December, 2011.
(3) Compute the total mortgage interest payments which the Johnsons can use on their 2010 tax deductions.
I showed you how to complete it in Excel. I did the full amortization schedule so you can see it being paid off exactly to the penny. The formulas are in the cells.