University Mortgage Corp. has a new product with both a fixed rate and interest-only component. Mr. Eagle would like to finance a property that costs $250,000. The financing terms are:
15% down payment, 1 discount point, 80% will be fixed rate, 20% interest only.
The fixed portion of the loan is for 25 years at an annual interest rate of 4%.
The interest-only portion is also for 25 years at an annual interest rate of 5%.
Calculate Mr. Eagle's monthly payments and end of year balances for each of the first three years.
(Show the work by using excel)