|In this problem, you will find the amount owed at the end of one year with payments made each month.|
|Steps to Perform:|
|1||Start Excel. Download and open the workbook named:||0|
|2||In cell E7, calculate the new balance at the end of month 1. Fill cell E7 down the column to cell E36.||4|
|Note: The values in range E8:E36 will automatically change after completing the next steps.|
|3||In cell B8, find the balance at the beginning of month 2. Fill cell B8 down the column to cell B36.||4|
|4||Fill cell C7 down the column to cell C36. Fill cell D7 down the column to cell D36. Apply to range C8:D36 the same formatting as for cell E7. Select cell E7. On the Home Tab, click Format Painter and then select range C8:D36.||4|
|Note: The values in range D7:D36 should be equal to $50.|
|5||In cell F38, find the amount owed at the end of one year.||2|
|6||In cell F40, find the number of months to pay off the loan.||2|
|7||Save your file and submit for grading.||0|
|Buying a Flat Screen TV||Principal:||$ 1,000.00|
|1||$1,000.00||$10.00||$50.00||No. of periods|
|2||in 1 year:||12|
|Part b:||Amount owed at end of 1 year:|
|Part c:||Number of months to pay off loan:|
In the example given in the chapter involving buying a flat-screen TV for $1,000 with a credit card that charges 12% APR we simply calculated the amount owed at the end of one year with no payments made.
a.) Redo this problem but now make a $50 payment each month. A payment will pay off part of the loan so what you owe goes down. Fill down to 30 months.
b.) How much do you owe at the end of one year? In cell F38 enter a simple formula which links to the cell with the answer in it. So if the amount you owe at the end of one year is in cell E8, your formula in F38 would be =E8.
c.) How long will it take you to pay off the loan? In cell F40 enter a simple formula which links to the cell with the answer in it. So if the number of the month the loan is paid off is in cell E8, your formula in F40 would be =E8.