Refer to Problem 4. For each of the payment schedules, determine the present worth of the loan payments made by the borrower. Use an Excel® spreadsheet and program it such that you can enter different interest rates for the borrower’s TVOM. Use TVOM rates of 6 percent, 21 percent, and 36 percent compounded monthly.

Refer to problem 4

Upon graduation, Steven purchases a new home theater system for his apartment. To finance the system, he ‘‘borrows’’ \($5\),000 from a new credit card at 21 percent per year compounded monthly. He fully intends to pay off the ‘‘loan’’ in 1 year while making monthly payments. Develop an Excel® table to illustrate the payment amounts and schedule for the loan, assuming payback follows

a. Plan 1: Pay the accumulated interest at the end of each interest period and repay the principal at the end of the loan period.

b. Plan 2: Make equal principal payments, plus interest on the unpaid balance at the end of the period.

c. Plan 3: Make equal end-of-period payments.

d. Plan 4: Make a single payment of principal and interest at the end of the loan period.

e. A different plan: Pay \($X\)in principal at the end of months 1, 2, and 3; pay \($2\)X at the end of months 4, 5, and 6; then \($3\)X at 7, 8, 9; and finally \($4\)X at 10,11,12. In addition, pay the accumulated interest at the end of each interest period.