MA270 Lab Report 1 Take-Home Component
The following questions should be completed in the Excel …le named MA270TakeHome1.xlsx (found under "Weekly Lab Information"
in the Content Browser on the lab MyLS page) before the lab on Wednesday, January 20th. You may discuss the questions with
others but ensure you create your own …le. If the work is not your own, then you may …nd question(s) on the lab assignment next
week challenging as they will involve manipulating this …le.
Go to your scheduled lab in Zoom on Wednesday, January 13th to work on the …le (Recall: Participation is a component
of the lab grade in the course. Whether it is a formal lab session or a take home week, be sure to attend your registered Zoom
lab each and every week). The IAs will be present in the labs to assist you with any questions that you may have pertaining the
following worksheet.
When a question references a speci…c function in Excel, do an internet search for "???? function in Excel". There
are a lot of resources available that explain how speci…c functions work in Excel.
1. Amortization Schedule:
Suppose that you are buying a condominium at a cost of $450,000, 20% of which you already have saved as a down payment
on the home. To …nance the remaining cost of the home you receive a mortgage at RBC.
(a) Do an internet search for "RBC Mortgage Payment Calculator" and click on the link for the payment calculator.
i. Select "Advanced" and enter the "Mortgage Amount" (cost minus down payment).
ii. For the "Amortization period" select "15 Years".
iii. By default, the "Payment Frequency" should be set to "Monthly", the "Interest Rate" at RBC’s current rate, the
"Interest Type" to "Fixed", and the "Interest Term" to "5 Years" (if not, please change them accordingly).
iv. Now click "Calculate".
The webpage that appears gives you a summary of the mortgage over the 5 year term (after which the remaining balance
needs to be renegotiated) and the entire 15 year amortization period.
(b) Let’s take a more in depth look by creating an amortization schedule for the mortgage in part a). Open the Amortization
Schedule Excel Worksheet (1st "tab" at bottom of the Excel …le when opened) and complete the following in the …le.
i. Using the information from the mortgage calculator in part a), enter the "Mortgage Amount" and "Monthly Payment" in cells B1 and B2.
[Note: Cell B6 is auto-…lled using a previously entered formula. If you are not familiar with formulas in Excel click
on cell B6 to see how it is entered.]
ii. In cell B3 enter the posted annual rate. Noting that the annual posted rate is compounded semi-annually, enter a
formula in cell D3 (which references cell B3) that determines the equivalent annual rate compounded monthly (see
lab notes on MyLS).
[Note: Cells C6 to C185 are auto-…lled using previously entered formulas.]
iii. Enter a formula in cell D6 that calculates the monthly interest over the month of January in 2021.
[Note: Be sure to use reference cell C6 in your formula so that it will re-calculate the interest if the value in B3 ever
changes.]
iv. Enter a formula in cell E6 that calculates the closing balance at the end of January.
[Again, don’t use speci…c values. Reference cells B2, B6, and D6 in your formula.]
v. Enter =E6 into cell B7 (as the closing balance in January is the opening balance in February) and copy this formula
to cells B8 to B185.
vi. Copy the formulas from cells D6 and E6 to cells D7 to D185 and E7 to E185, respectively, to complete the amortization
schedule.
Note:
You have completed the schedule correctly if in January, 2030 the opening balance is $158,106.11, the interest accrued is
$284.62, and the closing balance is $156,047.44.
2. Bond Schedule:
Suppose that you purchased three hundred AAPL4001810 Apple Inc. bonds on November 4th, 2020 and planned on holding
them until maturity.
(a) To …nd the speci…c bond, complete the following:
i. Do an internet search for "…nra bond center" (Financial Industry Regulatory Authority).
involves /BondCenter/ in the URL.
Click on the link that
ii. Click on the "search" tab in the middle of the webpage that appears.
iii. Under "Issuer Name" enter Apple and click on "Show Results". A list of available Apple bonds will appear.
iv. Find the bond named AAPL4001810 and click on the link under "Issuer Name".
(b) Open the Bond Schedule Excel Worksheet (2nd "tab" at bottom of Excel …le) and complete the following:
i. Input the relevant AAPL4001810 information found on the webpage into cells B2 to B10 (leave cell B11 blank). You
may assume that the given coupon rate is compounded semi-annually and the bond is redeemable at par.
Notes:
To …nd the price that you paid for each bond of the 300 bonds, change the dates in the "Price Chart"
and move the cursor over the chart to …nd the price on November 4th, 2020 (i.e. 11/04/2020).
Right click on cells B7 and B8 and select Format Cells -> Number -> Date to see the default on how
dates are to be input.
ii. In cell B11, use the =YIELD Excel function to determine the bond’s yield.
Notes:
If you are unsure how to use this function, do an internet search. When using the function, do note that
the price and redemption are based on a single $100 bond.
Also, be sure to reference cells B2 to B10 in your formula. Do not enter speci…c values. This will help
in the future if any of cells B2 to B10 were to ever change.
iii. Complete row 16 (i.e. Information for coupon number 1 in the bond schedule). Again, do not enter speci…c values
in the cells. Instead, reference cells in rows 1 to 15 of the worksheet.
iv. Complete the bond schedule by copying row 16 to the remaining number of coupon payment rows (you’ll need to
quickly …gure out how many coupon payments there are remaining).
Note:
You have completed the schedule correctly if on the 10th coupon payment the interest amount is $430.90,
the book value adjustment is $146.60, and the investment’s book value is $36,381.55. Also, the bond’s book
value should be equivalent to its face value after the …nal coupon payment.
(c) Open the Percent Change Excel Worksheet (3rd "tab" at bottom of Excel …le):
i. Copy the information from cells B2 to B11 of the Bond Schedule Worksheet into the Percent Change Worksheet.
Note:
If, for example, in cell B2 you type = and then click on the equivalent cell in the Bond Schedule sheet
that data will transfer to the Percent Change sheet.
ii. Suppose that the yield was actually 0.1% higher than that determined in cell B11. In cell B16, use the =PRICE
function to determine the new price of a $100 bond on November 4th, 2020.
iii. In cell C16, enter a formula that calculates the exact percent change in the bond’s price when the yield is increased
by 0.1%.
iv. Using the commands in parts (c)(i)-(iii), complete cells B17 to B21 and C17 to C21.
Note: You have completed this worksheet correctly if the percent change is 4.9293% when the yield decreases by 0.3%.