You would like to take out a $300,000 loan for a 30-year fixed mortgage and the bank is offering a 30-year fixed rate annual rate of 5.0% with monthly payments. (Note: the interest rate given here is an annual value and you must correct for monthly payments.) Use the APR convention for rate conversion. Call the worksheet “Simple Loan”. a. The bank is willing to offer a lower interest rate (annual rate of 4.85%) if you put $30,000 as a down payment, reducing the amount of the loan. If the alternative to putting $30,000 down is to leave the money in a bank savings account that yields 1% annually, what financial decision makes more sense? Defend your answer and be sure to explain any assumptions made. b. Now use Goal Seek to determine the interest rate required for the bank account to make the decision alternatives equivalent.
Pls show the excel screenshot and excel functions applied.