Please show step by step how to solve the problem in Excel

Answer: 355.48

1.) You decided to buy a new car. To finance the purchase, you borrowed $27,400 at an interest rate of 2.28%. You will be making monthly payments for 6 years to pay this loan. From your first monthly payment, how many dollars will be allocated to the principal? How much of the monthly payment is paid on the balance in the first payment? Hint: Use your amortization schedule to calculate the payment, the interest and the amount paid on the balance.

Round to the nearest penny and enter your answer in the box below.

Use the amortization worksheet

1. Calculate the payment in Excel using the monthly interest rate (annual rate/12), number of years * 12 (nper), -PV and 0 for FV. Since it is a monthly payment adjust for monthly nper and interest.

2. Take the loan amount * monthly interest rate = monthly amount of interest that is paid

3.Monthly payment - monthly interest = amount of principle paid on the loan that month

Thank you.

Please show step by step how to solve the problem in Excel

2.) You figure that your student loan will total $57,896 by the time you finish your degree. If you want to pay off your student loan within 10 years of finishing your degree, how much will you have to pay per month to pay it off (assume an annual interest rate of 6.67%. Please respond to the nearest penny.)

Answer: 662.42

You want to find the payment to pay off the loan. It is monthly, so you need to adjust the nper and rate to monthly.

The amount owed is the PV. The FV is 0 since you want to have it all paid.

The nper is the number of years *12 since you are making monthly payments.

The rate is /12 to get a monthly rate. Remember a 10.44 rate = 0.1044. The monthly rate is 0.1044/12 = 0.0087

pmt = (rate/12, nper adjusted to monthly, PV, 0,0 )

post your answer as a positive with two decimal places.

Thank you.

Please show step by step how to solve the problem in Excel

3.) Your great-uncle Buford passed away. You didn't really know him. But you found that he left you $573,564 in his will. You have decided that you wanted to invest that money, and not touch it until it has grown to $1,000,000. If you believe you can earn 9.77% per year on your investment portfolio, how long will it take for your original investment of $573,564 to turn into $1,000,000? (Please respond in years, with two significant decimal points - e.g. 8.45 for 8.45 years).

Answer: 5.96

To calculate the years use the nper function in Excel.

=nper( rate, pmt, pv, fv, 0 )

It is annual with no payments, so pmt = 0.

The $ invested is coming out of your pocket, so make it negative. The FV will be positive. The rate of 10.44% = 0.1044.

enter the data into the Excel formula and it should provide you with the years.

If you get the #NUM! error then you have all positive or all negative PV & FV.

Answer rating: 100% (QA)

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