Name:_______________________________Project 4: Car and Home LoansIn this project, you will investigate buying a house or a new car using internet calculators to help you. 1. Look through the local real estate section of your newspaper or the car advertisements. Find the car or home of your wildest dreams or find a more realistic car or home you think you might be able to afford. If you are working in a group, youmay want to all pick the same car or home. That way, you can each investigate different interest rates and time periods for the loan. Describe the car or home:2. Use an online loan calculator such as Javacalc.com or use an internet search engine (such as www.google.com) to find a loan calculator. a. Decide on a reasonable interest rate and time period to try in the calculator. Interest rates can usually be found with the calculators or in the local paper. A reasonable time for a car loan is 3 to 5 years. Home loans are typically held for 15, 20 or 30 years. Write down the interest rate and time period you decided to use:b. Write down the cost of the car or home, and show your calculations for down payment and/or trade-in value.- You may decide on your own how much of a down payment to make. They are typically between 5% and 20% of the price of the home or car.- If you are getting a new car, use the Kelly Blue Book site, www.kbb.com to determine the trade-in value of your old car; it also has prices of new cars.c. Using the loan calculator, type your interest rate, time period and loan amount toget the monthly payment you would have to make. Write the result here.3. Use the following formula to verify the value, R, given by the loan calculator: 1212112 121 112ttr rpRr� �� �+� �� �� �� �=� �+ -� �� �where R is the monthly payment, p is the amount of the loan (principal), r is the annual interest rate and t is the number of years to amortize the loan. Show all your steps in calculating the answer.4. Using the mortgage calculator, try several different time periods, keeping the interest rates the same. a. Write down the monthly payments you get for each different time period. How much does the monthly payment change for different time periods?b. Many calculators will give you the total cost of the loan or the total interest paid. (Add the total interest paid to the initial loan amount to get the total cost of the loan). If the calculator you picked does not do this, go back to the search engine and pick a new one. How much is the total cost of the loan for each different time period? c. Does a longer time period for a loan result in a higher or lower monthly payment? d. Does the total cost of the loan increase or decrease for a longer time period? e. Considering your answers to c and d, which time period would you pick for your car or home loan?