NUMDF M7 X F H M B C D E G K 2-5: Credit Card Interest Interest on Balance -- Extra Payment Scenario: You just had $2000 in car repairs and decide to put it on a credit card and pay the minimum required listed on the bill plus some extra each month. Note Changes to instructions are highlighted. Starting Balance $2,000 Interest Rate 1.75% per month Note: This is an APR of 21% Required Minimum Payment CHANGE: Now you decide you can afford to so Towards Balance 1.25% per month pay a little more on this each month: M Balance Finance Charge Minimum reduction in balance Month's Payment New Balance 1. Write a formula in Cell C8 to compute the monthly Finance Charge (Simple Interest based on the Balance in Column B and the interest rate in Cell D4. Remember to use "$D$A" to keep this cell in copied formulas. 1 $2,000 2 3 4 2. In cell D8, Use a formula to compute the minimum balance reduction required based on the Balance in Column B and the required minimum percentage pay in D5 (SD$5) 5 6 Nog 3. CHANGE: In Cell E8, use a formula to Minimum Payment Extra Pay edy Type here to search Clipboard Font Alignment Number Styles M A B C D E F M 9 G H K compute the required payment for the month: C# Plus the extra amount in SK 7 10 11 3 3 12 13 14 15 4. CHANGE: new Balance (cell F8), use a formula to subtract the minimum reduction and subtract the extra pay amount from the old Balance in B8. Then copy this cell to B9 (+F8). 16 17 18 19 5. Copy the formulas from C8,D8,58,F8 to C9,D9,19,F9. Now row 9 is complete. CHANGE: copy row 9 to the other months in the table until the new balance is less than zero (red will indicate negative) 20 21 22 23 24 25 6. Analysis with Extra Pay: a. How much interest did you pay on this $2000 loan? b. How many months did it take? c. How much did you save compared to making the minimum payment? 26 27 28 no Minimum Payment Extra Pay edy B D E F G H K M 36 37 38 39 A 29 30 31 32 33 34 35 36 ANSWERS: a. Interest: b. Months: C. Amount Saved: 40 42 43 44 45 46 47 48 49 37 38 39 40 Red indicates an overpayment! 41 42 43 44 50 51 52 53 54 46 % 47 48 R$ 55 E G H 55 56 48 49 50 57 58 59 60 51 52 53 54 55 56 62 63 64 65 66 67 68 69 70 71 72 73 74 57 58 59 60 61 62 63 64 65 66 67 Minimum Payment Extra Pay A B D F G H 77 78 71 72 79 80 81 82 83 84 85 86 37 38 39 20 R 81 82 83 1 22 23 24 84 85 86 87 Minimum Payment Extra Pay earts A C D E F H 95 K 96 88 89 90 97 98 91 99 92 93 100 101 94 102 95 103 96 104 97 105 98 106 99 107 100 108 101 109 102 110 103 111 104 112 105 113 106 114 107 Minimum Payment Extra Pay Ready RE Type here to search A G H 115 108 116 109 117 110 118 111 119 112 120 113 121 114 122 115 123 116 2 124 117 125 118 126 119 127 120 128 121 129 122 130 123 131 124 132 125 133 126 S 134 127 inn an Minimum Payment Extra Pay D F A 135 128 H 136 129 137 130 138 131 139 132 140 133 141 134 142 135 143 136 144 137 145 138 146 139 147 140 148 141 149 142 150 143 151 144 152 Total Interest: 153 154 $0.00 155