George Mason University Interest Rate & Loan Payment Rate Excel Worksheet

23. Fifteen years ago you put $300,000 into an interest-earning account that is compounded semi-annually. Today it is worth $475,000. What is the annual effective interest rate?

18. A borrower takes a 30-year, fully amortizing, 5/1 ARM for $225,000 with an initial interest rate of 4.375%. Assuming the index on which the loan rate is based rises by 1 percentage point in the fourth year of the loan and remains at that level, what will the payment be in the sixth year of loan?

6. A borrower takes out a 30-year mortgage loan for $800,000 with an interest rate of 3% and a loan origination fee of $9,000. What is the effective annual interest rate on the loan if the loan is carried for all 30 years?

13. A. What is the principal portion of the 220th monthly payment of a fully amortizing $650,000, 30-year fixed rate loan with an interest rate of 3.2%?

B. How much interest has been paid until now (through the 220th payment)?

16. A lender is prepared to provide a loan to borrower Beckie, but would like to use an original fee to ensure a lender’s yield of 5.3%. Beckie’s home costs $650,000. The lender will provide an 80%, 30 year, fully amortizing loan, with monthly payments, and an interest rate of 4.5%. How much should the origination fee be if the lender knows that Beckie will only stay in the home for 20 years?