Repayment of a loan requires the periodic payment of interest and principal. You are interested in the amount of principal you pay in the 60th period of a loan. We can use the PPMT (rate, per, Nper, PV, [fv], [type]) function for this purpose. Assume the following parameters for the loan and PPMT function:

Rate = 40% (annual rate - don't forget to divide by 12 in PPMT function to match monthly input data -- per, Nper)

Per = 60th month

Nper = 360 month

PV = $150,000

Create a two - way data table for the calculation of the principal payment for the 60th period for a variety of annual interest rates (rate = 4.0 to 6.5%, 0.5% increments as row value) and present values of the loan (PV = 150,000 to 250,000, in 25,000 increments as column value).

Format results such that you have two decimals (123.45).

Rate = 0.0400

Per = 60

Nper = 360

PV= 250000

PPMT ==>

Answer rating: 100% (QA)

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