1) Find the unpaid balance on the debt

1) 

First we calculate Monthly Payment using PMT FUnction in Excel:

=pmt(rate,nper,-pv,fv)

Here,

PMT = Monthly Payment = ?

Rate = 3%/12 = 0.25% compounded monthly

Nper = 25 years * 12 months = 300 months

PV = $160,000

FV = 0

Substituting the values in formula:

=pmt(0.25%,300,-160000,0)

PMT or Monthly Payment = $758.74

After 6 years of monthly payments:

Number of monthly payments (N) = 228 {(25-6) years * 12}

Now we calculate Unpaid Balance on Debt using PV Function in Excel:

=-pv(rate,nper,pmt,fv)

Here,

PV = Unpaid Balance on Debt = ?

Rate = 0.25%

Nper = 228 months

PMT = $758.74

FV = 0

Substituting the values in formula:

=-pv(0.25%,228,758.74,0)

PV or Unpaid Balance on Debt = $131,738.83

2) 

a. Present value of the cash flow stream is $1,358.42

b. Value of the cash flow stream at Year 3 is $338.09