You are planning on buying a house for $250,000. You have an agreement with the credit union to borrow the needed money if you make a 20 percent cash down payment, and make monthly payments for 30 years at an annual interest rate of 5.25 percent compounded monthly.
a) What monthly payments will be required?
b) How much principal reduction will occur in the first payment? How much principal reduction will occur in the last payment?
c) Prepare a spreadsheet that will show each payment, how much of each payment will go to principal and how much will to interest, the current loan balance, the current equity, and the cumulative interest paid. Graph interest paid and principal paid vs. time.