OVERVIEW This project integrates quite a few components of your course. The most important thing to keep in mind, as you progress through this project, is to take one step at a time. Do not rush through this project. After completing each step, pause, take a break, and give some thought to the task you’ve just completed. If necessary, refer back to the relevant lesson, assignments, and textbook chapters each step refers to. This will reinforce the learning process. INSTRUCTIONS In this project, you’ll create a loan amortization schedule for an example mortgage loan. Imagine the mortgage is for a nonresidential real property your company has purchased. The property includes land and a building. Once you’ve created the amortization schedule, you can use it to prepare other financial documents. Your project is divided into sev- eral steps for you to follow. Each step includes figures that illustrate the concepts. Step 1: Create a Loan Amortization Schedule In this first step of your project, you’ll need to create a loan amortization schedule. The following table illustrates the pay- ments and interest amounts for a fixed-rate, 30-year mortgage loan. The total amount of the mortgage is $300,000, and the interest rate is 6 percent. This mortgage requires monthly payments of $1,798.65, with a final payment of $1,800.23. The table was created in Excel. The following is an explanation of the columns in the table: ■ The first column in the table, with the heading “Payment Number,” shows the 360 payments required to pay off the mortgage loan (30 years, with 12 monthly payments per year). 129 G ra d e d P ro je c t G ra d e d P ro je c t ■ The second column, with the heading “Payment Amount,” shows the monthly payment amount. ■ The third and fourth columns show the portion of the monthly payment paid for interest, and the portion paid towards the principal. ■ The fifth column, headed “Balance,” shows the starting balance of $300,000, and the remaining balance each month after the principal is subtracted. ■ The sixth column, headed “Current,” reflects the current portion of the principal (12 months). ■ The amounts in the “Non-Current” column are calculated by subtracting the current portion of the principal from the total balance. ■ The “Annual Interest Expense” column provides a run- ning total of the interest expense on the mortgage for the entire 12-month period. ■ The “Totals” under the “6% Interest Expense” and “Principal” columns show the final totals for the 30-year life of the mortgage. Graded Project130 Payment Number Payment Amount 6% Interest Expense Principal Balance Current Non-Current Annual Interest Expense 0 $300,000.00 $3,684.02 $296,315.98 $0 1 $1,798.65 $1,500.00 $298.65 $299,701.35 $3,702.44 $295,998.91 2 $1,798.65 $1,498.51 $300.14 $299,401.21 $3,720.95 $295,680.26 ————————————-Break in Sequence————————————- 359 $1,798.65 $17.86 $1,780.79 $1,791.28 $1,791.27 $0 360 $1,800.23 $8.96 $1,791.27 $.