Tonisky

Explanation of loan options (2 pages + Excel chart)

1. Research the current mortgage interest rates for a 10-year, 15-year, 20-year, and 30-year loan.
2. In Excel, graph the interest rates using years as the X-axis and interest rates as the Y-axis.
3. Using the graph, describe the following:
1. Type of yield curve presented in the graph
2. Relationship between interest rates and number of years to maturity
3. Impact that risk and inflation has on the interest rates as the maturity date is lengthened
4. Make a recommendation to Ms. Jacobsen on what mortgage loan to take (10-year, 15-year, 20-year, or 30-year).
5. Justify your recommendation.