Complete a solution to the selected issue, problem, or opportunity based on your chosen problem from Week 2.

Chosen Problem: Purchase of a home. The real world data input will be mortgage amount, rate, compound frequency, and length in years. The average cost of a new home in State College, PA is 135,000. With our decent credit score PNC Bank would approve us for a 03-year mortgage at 6.1% compounded monthly. However in an attempt to reduce total interest paid we will calculate assuming; no money down, $10,000 down and, $25,000 down.  We will construct a spread sheet in excel which will show remaining balance per year, total interest paid for each scenario assuming all payments made on time, and payment. Our governing equation is the present value equation; PV = PMT(1-(1+i)^-n)/i or rewritten to solve for payment from mortgage initial amount borrowed; PMT = PV(i/(1-(1+i)^-n)). Then to find balance per year will we change n accordingly in our excel model.

Propose a mathematical model for the selected issue, problem, or opportunity individually. Then, as a team, select one model to use for the solution.

Include the following:

• Justification for the team’s chosen model
• Mathematical model
• Applied formulas
• Step-by-step calculation