Voluntary Makeup Homework # II
(30% points to be added in any Exam + 1 HW grade)
FALL 2016
Lubin School of Business Pace University
Securitization of Mortgages II
Using the code from the HW # 3 – Securitization of Mortgages I you will improve your program according the next guidelines:
- You will include the Worksheets: “Principal”, “Interest”, “Amortization”, “Main” and “Input”.
- The Worksheets “Input” will have the columns A, B, C and D with the following information:
- (A): Includes the principal at the beginning of the mortgage
- (B): Includes the number for the next payment of the mortgage
- (C): Includes the time for the mortgage (15 or 20 years only)
- (D):Includes the rate for the mortgage (3.5%, 3.6%, 3.7% and 3.9%)
- The Worksheets “Principal” will store the principal balance for all mortgages included in “Input” using as a maximum of 240 columns and a number of rows equal to the total mortgages included in “Input”.
- The Worksheets “Interest” will store the Interest for all mortgages included in “Input” using as a maximum of 240 columns and a number of rows equal to the total mortgages included in “Input”.
- The Worksheets “Amortization” will store the Amortization for all mortgages included in “Input” using as a maximum of 240 columns and a number of rows equal to the total mortgages included in “Input”.
- Each column for the Spreadsheets: Principal, Interest and Amortization will have a final row with the totals for all values above.
- The program reads each mortgage from Input, and calculates the: Principal, Interest and Amortization for all future payments of the mortgage. The values are copied in Worksheets: “Principal”, “Interest” and “Amortization”.
- All values are totalized in the last row of each Worksheets.
- The program calculates the cash flows for the bond in Worksheets “Main”
- The program receive the total number of mortgages from Cell E1 from Worksheets “Input” (using a function to count in range A2:A1002)
- Use the Excel files 15-35, 15-36, 15-37, 15-38, 20-35, 20-36, 20-37 and 20-38 from Blackboard.
- The program must be activated for a button “Macro Run” located in Worksheet “Main”.
Example for a bond with 2 mortgages:
Worksheet “Input”
A | B | C | D | E | |
1 | Principal | Last Payment | Term (years) | Rate( %) | 2 |
2 | 135000 | 64 | 20 | 3.50% | |
3 | 234567 | 37 | 15 | 3.60% | |
4 |
Worksheets “Principal”
A | B | C | D | E | |
1 | Principal | ||||
2 | 107532.6793 | 107062.2537 | 106590.4776 | 106117.347 | |
3 | 195947.0366 | 194843.6829 | 193737.0726 | 192627.196 | |
4 | Total | 303479.7159 | 301905.9366 | 300327.5502 | 298744.543 |
The value 107532.6793 = 0.796538365 x 135000 and
0.796538365 is the factor for Principal for payment 65 from file 20-35.xlsx for the Mortgage of 135000.
Worksheets “Interest”
A | B | C | D | E | |
1 | Interest | ||||
2 | 308.7154312 | 307.364887 | 306.0104655 | 304.6521555 | |
3 | 578.3591216 | 575.1024525 | 571.836171 | 568.5602488 | |
4 | Total | 887.0745528 | 882.4673395 | 877.8466365 | 873.2124043 |
The value 1308.7154312 = 0.002286781 x 135000 and
0.002286781 is the factor for Interest for payment 65 from file 20-35.xlsx for the Mortgage of 135000.
Worksheets “Amortization”
A | B | C | D | E | |
1 | Amortization | ||||
2 | 470.4255946 | 471.7761388 | 473.1305603 | 474.4888703 | |
3 | 1103.353658 | 1106.610327 | 1109.876608 | 1113.152531 | |
4 | Total | 1573.779252 | 1578.386466 | 1583.007169 | 1587.641401 |
The value 470.4255946 = 0.003484634 x 135000 and
0.003484634 is the factor for Interest for payment 65 from file 20-35.xlsx for the Mortgage of 135000.
Worksheets “Main”
A | B | C | D | E | F | ||||||||||
1 | CASH FLOWS BOND |
|
|||||||||||||
2 | Principal | Interest | Amortization | Total Payment | |||||||||||
3 | 303479.7159 | 887.0745528 | 1573.779252 | 2460.853805 | |||||||||||
4 | 301905.9366 | 882.4673395 | 1578.386466 | 2460.853805 | |||||||||||
5 | 300327.5502 | 877.8466365 | 1583.007169 | 2460.853805 | |||||||||||
6 | 298744.5430 | 873.2124043 | 1587.64140 | 2460.853805 |
The value 303479.7159 = 107532.6793 + 195947.0366 from Worksheets “Principal”
The value 887.0745528 = 308.7154312 + 578.3591216 from Worksheets “Interest” etc..
Hints:
- Use the code from HW 3
- Do the calculations for the first mortgage until the last payment
- Proceed with the next mortgage
- Use the proposed general statements to code your program
Results and due date
The results of the HW should be on a spreadsheet and submitted as an attachment to mvergara@pace.edu on Nov 30th, 2016 no later than midnight.
Submit your HW, even if the program doesn’t run properly.
Proposed Code