USING MICROSOFT EXCEL
USING THE UPPER AND LOWER FUNCTIONS IN EXCEL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bill would like to borrow $50, 000 and pay it off in 10 years. What components will he need to identify for a loan amortization schedule created on an Excel worksheet?
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beginning and ending loan balance
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year, rate, monthly interest
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beginning and ending loan balance and the amount of payment that applies to the principal and interest per year
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interest paid at the beginning and end of the year
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Explanation:
Detailed explanation-1: -Starting in month one, take the total amount of the loan and multiply it by the interest rate on the loan. Then for a loan with monthly repayments, divide the result by 12 to get your monthly interest. Subtract the interest from the total monthly payment, and the remaining amount is what goes toward principal.
Detailed explanation-2: -=PMT(17%/12, 2*12, 5400) For example, in this formula the 17% annual interest rate is divided by 12, the number of months in a year. The NPER argument of 2*12 is the total number of payment periods for the loan.
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