Question

You are considering taking out a one-year (12 month) loan to pay for your vacation. In cell 114. insert the PMT function. Divide the APR (cell 17) by the number of months ins year (cell 18). The term is one year (12 months). Use a cellreference. The Total Cost for the city

'is the present value. Use relative and mixed (or absolute) references correctly. Make sure the result is a positive value

Copy the function from cell /14 to the range 115:119 and maintain the original border formatting

Answer 1

To calculate monthly payments for a one-year loan, divide the APR by the number of months in a year and use the PMT function. Copy the function and maintain original border formatting.

Step-by-step explanation:

To calculate the monthly payments for a one-year loan:

1. Divide the Annual Percentage Rate (APR) by the number of months in a year to get the monthly interest rate.

2. Use the PMT function in cell 114 to calculate the monthly payments. The present value is the Total Cost for the city.

To copy the function and maintain original formatting:

1. Copy the function from cell B14 to the range B15:B19.

2. The border formatting should be maintained in the copied cells.

Answer 2

The question pertains to calculating monthly loan payments and the effects of extra payments on the loan's duration and interest, as well as maximum loan affordability calculations based on annual payments and interest rates.

Step-by-step explanation:

Loan Payment Calculations

Calculating the monthly payments for a loan involves determining how much you need to pay each month to pay off both the principal and interest over a set period. For a $300,000 loan with a 6% annual interest rate, compounded monthly over 30 years, the monthly payment can be found using the PMT function in financial calculators or spreadsheets. If you pay an additional 1/12th of your regular monthly payment, essentially making a 13th payment each year, it will significantly reduce both the time taken to pay off the loan and the total amount of interest paid.

To calculate the maximum loan that can be afforded with $12,000 per year at 4.2% interest annually over 30 years, we use the present value of an annuity formula. Joanna would be able to afford a maximum loan of $202,556.98. Over 30 years, she ended up paying a total of $360,000.

For a $160,000 student loan over 15 years at 6.8% interest, Mackenzie's yearly payment, Charese's for a 200,000 loan, and Tyler's time to pay off a $5,000 credit card bill with 21.9% APR with $300 monthly payments can all be calculated using similar present value and payment formulas.