Template:Loan Calculator Exercise Answer Key

From Planipedia

 

Answer 1:

1. Select Loan Calculator from the Calculators drop down menu on the home page.
2. Enter the {{{Currency}}}{{{Amount of Loan1}}} principal in the Amount borrowed field.
3. Enter the current date as the Loan Date.
4. Enter the Renewal Date as the Loan Date plus the amortization period (6 months later).
5. Enter an Interest Rate of 15%.
6. Click the drop-down menu beside the Compounding field and choose Monthly.
7. Set the Amortization to months using the radio buttons to the right and enter 6 for the amortization period.
8. Click the drop down menu under Payment Type and choose the Blended payment option.
   1. Note: "Blended payments" refer to payments made by the mortgagor that go against the interest owed and the principal of the loan simultaneously.
9. If necessary change the Frequency of Payments to the Monthly option.
10. Click on the Calculate button next to Payment.

The result should be {{{Currency}}}{{{Total Result}}}

Answer 2:

1. Select Loan Calculator from the Calculators drop down menu on the home page.
2. Enter the {{{Currency}}}{{{Amount of Loan2}}} amount in the Amount borrowed field.
3. Enter the current date as the Loan Date.
4. Leave the Renewal Date at the default of the current date, since the amortization period is unknown. It will automatically update when the Amortization is calculated.
5. Enter an Interest Rate of 10%.
6. Click the drop down menu under the Compounding field and choose Monthly.
7. Ensure that the Amortization is set to Months using the radio buttons.
8. Click the drop down menu under Payment Type and choose the Blended payment option.
9. If necessary change the Frequency of Payments to the Monthly option.
10. Enter a payment amount of {{{Currency}}}{{{Monthly Payment1}}} in the Payment field
11. Click Calculate beside the Amortization Period.

The amortization should be 35 months.

Answer 3:

1. Select Loan Calculator from the Calculators drop-down menu on the Home page.
2. Enter the {{{Currency}}}{{{Mortgage1}}} amount in the Amount borrowed field.
3. Enter the Loan Date as three years ago today.
4. Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change.
5. Enter an Interest Rate of 10.25%.
6. Click the drop down menu under the Compounding field and choose Semi-Annual.
7. Set the Amortization to years using the radio buttons to the right and enter 20 for the amortization period.
8. Click the drop down menu under Payment Type and choose the Blended payment option.
9. If necessary change the Frequency of Payments to the Monthly option.
10. Click on the Calculate button next to Payment.
    1. The monthly payment should be {{{Currency}}}{{{Monthly Payment3}}}
11. Click on the Schedule button at the bottom of the screen to view the payment schedule.
12. Identify the Balance that remains after payment number 36 or at today’s date, and payment number 60 (5 years).
    1. The balance of the mortgage should be {{{Currency}}}{{{Balance of Mortgage}}} and {{{Currency}}}{{{Balance of Mortgage1}}} respectively.
13. Exit back to the Loan Calculator and enter 10% in the Increase/Year field measuring percentages and not dollar amounts.
14. Click Calculate beside the Amortization field.
    1. The result should be 9.25 years.
15. Click on the Schedule button at the bottom of the screen to view the payment schedule.
16. Identify the Balance that remains after payment number 36 (3 years) or today’s date, and payment number 60 (5 years).
    1. The balance of the mortgage should be {{{Currency}}}{{{Balance of Mortgage2}}} and {{{Currency}}}{{{Balance of Mortgage3}}} respectively.
17. Subtract these values from the original mortgage balances at the end of three years to determine the difference, or effect of the increase in payments.

The difference should be {{{Currency}}}{{{Difference}}} and {{{Currency}}}{{{Difference1}}} respectively.