Can you show by using excel You just purchased a 400000 hous

Can you show by using excel?

You just purchased a $400,000 house and gave a 20% down payment. For the remaining portion, you obtained a 30-year mortgage at a 6% interest rate. (6 points) What are the monthly payments on this mortgage? If the house appreciates at a 3 percent annually, what will be the value of the house in ten years? In ten years, how much equity will you have on this home?

Solution

PV = 0.80*400,000

FV = 0

N = 360

rate = 6%/12

use PMT function in Excel

monthly payments = 1,918.56

b. Put N = 120 and calculate FV

mortgage outstanding after 10 years = 267,794.32

equity = 400,000 * 1.03^10 - 267,794.32 = 269,772.23