Question

15 Use the Loan worksheet to complete the loan amortization table.

In cell F2, insert the IPMT function to calculate the interest for the first payment. Copy the function to the range F3:F25. (The results will update after you complete the other functions and formulas.) 5
16 In cell G2, insert the PPMT function to calculate the principal paid for the first payment. Copy the function to the range G3:G25. 5
17 In cell H2, insert a formula to calculate the ending principal balance. Copy the formula to the range H3:H25. 5
18 Now you want to determine how much interest was paid during the first two years.
In cell B10, insert the CUMIPMT function to calculate the cumulative interest after the first two years. Make sure the result is positive. 5
19 In cell B11, insert the CUMPRINC function to calculate the cumulative principal paid at the end of the first two years. Make sure the result is positive. 5
20 You want to perform a what-if analysis to determine the rate if the monthly payment is $1,150 instead of $1,207.87.
In cell B15, insert the RATE function to calculate the necessary monthly rate given the NPER, proposed monthly payment, and loan. Make sure the result is positive. 5
21 Finally, you want to convert the monthly rate to an APR.
In cell B16, insert a formula to calculate the APR for the monthly rate in cell B15. 5

Answer 1

The problem involves creating a loan amortization table using Excel with formulas such as IPMT, PPMT, CUMIPMT, CUMPRINC, and RATE, as well as a simple calculation to convert a monthly rate to an APR.

Step-by-step explanation:

This question involves understanding and applying financial formulas in Excel to perform loan amortization, calculate interest and principal payments, and determine annual percentage rates (APR). Specifically, the IPMT and PPMT functions will be used to calculate the interest and principal components of loan payments respectively. The CUMIPMT and CUMPRINC functions will provide cumulative interest and principal paid over a period of time, while the RATE function will help ascertain the monthly interest rate given a change in the monthly payment amount. Finally, converting the monthly rate to an APR requires a simple multiplication formula.

To calculate the ending principal balance, one would typically subtract the principal paid from the previous period's principal balance. As for calculating the APR from a monthly rate, you would multiply the monthly rate by 12 (the number of months in a year) to annualize it.

Answer 2

To complete the loan amortization table, follow the provided steps and use the IPMT, PPMT, CUMIPMT, CUMPRINC, RATE, and APR functions in Excel.

Step-by-step explanation:

Loan Amortization and Analysis

To complete the loan amortization table, follow these steps:

1. In cell F2, insert the IPMT function to calculate the interest for the first payment. Copy the function to the range F3:F25.
2. In cell G2, insert the PPMT function to calculate the principal paid for the first payment. Copy the function to the range G3:G25.
3. In cell H2, insert a formula to calculate the ending principal balance. Copy the formula to the range H3:H25.
4. In cell B10, insert the CUMIPMT function to calculate the cumulative interest after the first two years. Make sure the result is positive.
5. In cell B11, insert the CUMPRINC function to calculate the cumulative principal paid at the end of the first two years. Make sure the result is positive.
6. In cell B15, insert the RATE function to calculate the necessary monthly rate given the NPER, proposed monthly payment, and loan. Make sure the result is positive.
7. In cell B16, insert a formula to calculate the APR for the monthly rate in cell B15.