You may use your financial calculator or excel for calculations but be sure to show your work (i.e. rate, periods, payments, etc.). For the amortization schedule be sure to print the schedule so all columns fit on one page and only include the first and last pages of the schedule when you pass it in.Jack Casey is interested in buying a waterfront vacation home and has saved $300,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 12 months. Casey wants to make the purchase 18 months from today and wants to have $400,000 saved up for the down payment.What is the amount of each of the additional payments he must make for his plan to work out? Assume Allen can earn 2% annual return in his investment account.If Casey takes out a 30-year, $1,200,000 mortgage at 5%, what will his mortgage payments be?Prepare an amortization schedule to prove that your answer is right and his mortgage will be paid off in 30 years.

Part 1: Future Value = $400,000 Rate = 2% Time period = 18 months - 12 months = 6 months Present…

Answered: You may use your financial calculator…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 27M

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You may use your financial calculator or excel for calculations but be sure to show your work (i.e. rate, periods, payments, etc.). For the amortization schedule be sure to print the schedule so all columns fit on one page and only include the first and last pages of the schedule when you pass it in.

Jack Casey is interested in buying a waterfront vacation home and has saved $300,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 12 months. Casey wants to make the purchase 18 months from today and wants to have $400,000 saved up for the down payment.
1. What is the amount of each of the additional payments he must make for his plan to work out? Assume Allen can earn 2% annual return in his investment account.
2. If Casey takes out a 30-year, $1,200,000 mortgage at 5%, what will his mortgage payments be?
3. Prepare an amortization schedule to prove that your answer is right and his mortgage will be paid off in 30 years.

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