I am borrowing $15,000 to buy a new equipment. I am going to make 60 end-of-month...

 

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I am borrowing $15,000 to buy a new equipment. I am going to make 60 end-of-month payments. The annual interest rate on the loan is 10%. The dealer will allow me to make monthly payments for Months 31 through 60 that are equal to half the monthly payments I will make for Months 1 through 30. Create an amortization table that shows the total payment, the interest, and the principal for each period. You must use Solver, and not the PMT function, to determine the monthly payments. Follow the steps below: 1. First list the inputs. ● Principal: $15,000 Monthly rate: annual rate/12, • Monthly payments30: enter a random amount here for now (Solver will work out the minimum payment later) • Monthly payments60: 0.5 * Monthly payments30 2. Create an amortization schedule for 60 periods. In the 'Payment' column, link the cells for all periods 1-30 to the input cell Monthly payments30 and for all periods 31-60 to the input cell Monthly payments60. Enter formulas, as appropriate, for the other columns in the table. A few pointers below: ● 3. Since we do not yet know the minimum payment amount and have simply entered a random value in the cell for Monthly Payments30, the ending balance for period 60 will most likely be non-zero. 4. Now, you can use Solver and enter the appropriate inputs. If you have set up the problem solution correctly, once click on "Solve", you should be able to arrive at a minimum payment of $408.09 for months 1-30 and $204.05 for months 31-60. The ending balance for the 60th month will be equal to zero. I am borrowing $15,000 to buy a new equipment. I am going to make 60 end-of-month payments. The annual interest rate on the loan is 10%. The dealer will allow me to make monthly payments for Months 31 through 60 that are equal to half the monthly payments I will make for Months 1 through 30. Create an amortization table that shows the total payment, the interest, and the principal for each period. You must use Solver, and not the PMT function, to determine the monthly payments. Follow the steps below: 1. First list the inputs. ● Principal: $15,000 Monthly rate: annual rate/12, • Monthly payments30: enter a random amount here for now (Solver will work out the minimum payment later) • Monthly payments60: 0.5 * Monthly payments30 2. Create an amortization schedule for 60 periods. In the 'Payment' column, link the cells for all periods 1-30 to the input cell Monthly payments30 and for all periods 31-60 to the input cell Monthly payments60. Enter formulas, as appropriate, for the other columns in the table. A few pointers below: ● 3. Since we do not yet know the minimum payment amount and have simply entered a random value in the cell for Monthly Payments30, the ending balance for period 60 will most likely be non-zero. 4. Now, you can use Solver and enter the appropriate inputs. If you have set up the problem solution correctly, once click on "Solve", you should be able to arrive at a minimum payment of $408.09 for months 1-30 and $204.05 for months 31-60. The ending balance for the 60th month will be equal to zero.

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