SHOW CLEAR WORK ON EXCEL

1. Regarding Problem 3, how much total interest and principal would be paid over the entire 30-year life of the mortgage in each case? Which payment pattern would have the greatest total amount of interest over the 30-year term of the loan? Why?

(reference problem 3)

A fully amortizing mortgage loan is made for $100,000 at 6 percent interest for 30 years. Determine payments for each of the periods a–d below if interest is accured:

a. Monthly.

b. Quarterly.

c. Annually.

d. Weekly.

2. An investor holds a long position in a futures contract on the S&P 500 Index. The futures contract has a term of 3 months, requires 10% initial margin, and has a futures price of $1,574. The investor posted $37,500 into the margin account at contract initiation. After the contract initiation, the futures price on the index experienced infrequent but dramatic drops. Two days ago, the investor received a margin call and was required to post an additional $17,500 to the margin account. Which of the following is most likely the maintenance margin on the contract?

(a) $17,500 (b) $18,750 (c) $22,500