Part I-A: Saving for down pmt for a Truck

Saving
Truck price $40,000.00 schedule PMT # $PMT $INT $BAL
Percent down 15%
APR 1% 1 $247.61 $0.00 $247.61
PMT/YR 12 2 $247.61 $0.21 $495.43
YR 2 3 $247.61 $0.41 $743.46
4 $247.61 $0.62 $991.69
Amount down $6,000.00 5 $247.61 $0.83 $1,240.13
Loan Amount $34,000.00 6 $247.61 $1.03 $1,488.77
Deposit/Mo $247.61 7 $247.61 $1.24 $1,737.63
8 $247.61 $1.45 $1,986.69
9 $247.61 $1.66 $2,235.96
10 $247.61 $1.86 $2,485.43
11 $247.61 $2.07 $2,735.11
12 $247.61 $2.28 $2,985.01
13 $247.61 $2.49 $3,235.11
14 $247.61 $2.70 $3,485.41
15 $247.61 $2.90 $3,735.93
16 $247.61 $3.11 $3,986.66
17 $247.61 $3.32 $4,237.59
18 $247.61 $3.53 $4,488.74
19 $247.61 $3.74 $4,740.09
20 $247.61 $3.95 $4,991.65
21 $247.61 $4.16 $5,243.42
22 $247.61 $4.37 $5,495.41
23 $247.61 $4.58 $5,747.60
24 $247.61 $4.79 $6,000.00

$5,942.70 $57.30

1. How much money is deposited? $5942.70

2. What is the total amount of interest earned? $57.30
3. What percent of the amount deposited is the interest earned? .9642% (This was not calculated
by the APY formula of (1+r/m)^m-1, but by dividing the interest earned by the total payments,
due to the format of the question.)
4. How does the percent in #3 above compare to the APR? Explain. The actual percent earned is
.0458% less than the APR of 1%
Part I-B: Saving for down pmt for a House

Home $250,000.00
Percent down 20%
APR 1.50%
PMT/YR 12
YR 3

Amount down $50,000.00

Mortgage
amount $200,000.00
Monthly deposit $1,358.74

Saving schedule PMT # $PMT $INT $BAL

1 $1,358.74 $0.00 $1,358.74

12 $1,358.74 $18.80 $16,417.46
24 $1,358.74 $39.61 $33,082.87
36 $1,358.74 $60.73 $50,000.00

$48914.68 $1085.32

1. How much money is deposited? $48914.68

2. What is the total amount of interest earned? $1085.32
5. What percent of the amount deposited is the interest earned? 2.2188% (This was not calculated
by the APY formula of (1+r/m)^m-1, but by dividing the interest earned by the total payments,
due to the format of the question.)
3.
4. How does the percent in #3 above compare to the APR? Explain. The actual percent earned is
.7188% higher than the APR.
5. How do the answers in #4 Part I-A and #4 in Part I-B compare? Explain. The percentage of the
deposit grew due to the extra year of payments. It is now more than the APR instead of less
than the APR.
 Part II- A: Truck Loan w/monthly payments after down pmt

Truck Price $40,000.00 Loan Amount $34,000.00

Percent down 15.00% APR 2.25%
APR 1.00% PMT/YR 12
PMT/YR 12 YR 5
YR 2

Amount down $6,000.00 Monthly payment $599.67

Loan Amount $34,000.00

PMT SCHED PMT# $PMT $INT PD $PRINC PD $BAL

$34,000.00
1 $599.67 $63.75 $535.92 $33,464.08
12 $599.67 $52.59 $547.08 $27,502.23
24 $599.67 $40.16 $559.51 $20,856.74
36 $599.67 $27.44 $572.23 $14,060.17
48 $599.67 $14.43 $585.24 $7,109.10
60 $599.67 $1.12 $598.55 $0.00

$35,980.18 $1,980.18 $34,000.00

1. What is the total amount of principle paid for the sixty payments? $34,000
2. What is the total amount of interest paid for the sixty payments? $1,980.18
3. What is the total amount paid for the sixty payments? $35,980.18
4. The total interest is what percent of the amount of the loan? 5.8241% However, this percentage
amount was figured as $1980.18/$34000 = .0582406. If I find the APY, or effective rate using
(1+r/m)^m-1, I receive a different answer of 2.2733%. This question is not concise.
Part II-B: Home Loan w/monthly payments

PMT
Home Loan Sched PMT # $PMT $INT PD $PRINC PD $BAL
Amount $200,000.00
$200,000.00
APR 3.75%
1 $926.23 $625.00 $301.23 $199,698.77
PMT/YR 12
12 $926.23 $614.48 $311.75 $196,322.45
YR 30
60 $926.23 $564.11 $362.12 $180,154.63

120 $926.23 $489.56 $436.67 $156,223.55

Monthly payment $926.23
240 $926.23 $291.25 $634.98 $92,566.43

360 $926.23 $2.89 $923.35 $0.00

$333,443.23 $133,443.23 $200,000.00

1. What is the total amount of principle paid for the 360 payments? $200,000
2. What is the total amount of interest paid for the 360 payments? $133,443.23
3. What is the total amount paid for the 360 payments? $333,443.23
4. The total interest is what percent of the amount of the loan? (If using effective rate formula)
3.8151%. (If determining what percent $133443.23 is of $200,000) 6.6722%
5. How does the total percent of interest paid for the truck loan compare to the total percent of
interest paid for the mortgage? When looking at the end result, or the APY, the ratio of interest
stated to interest paid is higher for the mortgage than the truck loan, due to the longer life of
the loan.

Part III

Reflection:

This project has only reinforced the epiphanies Ive had throughout the Amortization unit of this course.
Also, I found it surprising how much interest is paid on the mortgage! It hardly seems fair. I
experimented with the Excel formulas, the down payments, and the years of payments to see what
effect it would have on the interest paid for savings and loan payments both. It seems the more years,
or compounds, the more the APY. Lengthening the years can help in savings or hurt in financing. If I
refinanced my home to a shorter term, I would be paying thousands of dollars less, even though my
payments would be higher per month. I will be using the formulas that Ive learned here to compare
financial institutions while starting my savings and investments for the future, and also if I want to
finance a new car or home. I have already saved the spreadsheets used for this project to my desktop
for real life scenarios. This class and the project are very helpful!