You are the chair of a nonprofit pottery studio, "You are Fired." The board has been offered the opportunity to purchase the studio space for

$2,000,000, and can use part of its reserve fund to pay for the $400,000 down payment. It can get a twenty-year mortgage with end-of-

month payments at a 4 percent annual rate of interest. Please answer the questions below: Format answers with commas to separate

thousands, hundred thousands and provide decimal places as noted in the answer.

a. How much will the organization have to finance with the mortage? Please round to two decimal places, e.g., 2,400,000.00

not 2,400,000.

b. What is the effective periodic interest rate and number of periods for this mortage?

• Periodic Interest Rate: (Please round to five digits (e.g., 0.0020, not 0.002 or 0.2 percent)

• Number of Periods: (Please round to the one (e.g, 450 not 450.00)

c. Use the information from (a) and (b) and the payment function in Excel to determine the amount of the mortgage payment.

• PMT= $ (Please round to two decimal places)