The case is designed to determine and evaluate the payment amount of a car
loan and a mortgage, based on your income. If you prefer, you may assume that
your household income is $48,000 per year or $4,000 per month. Based on your
income, you may spend 28 percent of your monthly income on housing and 10
percent on a car loan. You are to put a 3 percent down payment on the house and
a 10 percent down payment on the car. These will make the loan to value of your
loans to less than one: 97 percent on the house and 90 percent on the car.
- Determine the car payment and mortgage payment with the following
conditions: your monthly household income, 10 percent for the car payment, and
28 percent for the mortgage payment. Also, assume a 10 percent down payment on
the car and a 3 percent down payment on the house.
- Create an amortization schedule, and graph the components over time:
interest, principal, and balance.
- Discuss the distributions of principal, interest, and the balance over the
life of the loan.
Quantitative Assignment 3