Waylon borrows $5,466 to be paid off in installments of $86.40 at the end of each month:
a) How many payments should he make to repay the loan, provided that the annual interest rate is 6.95%?
b) If the bank asks him to pay off the loan in four years, what is the monthly payment?
c) If the bank reduces the annual interest rate by 1.5% and asks him to pay off the loan in four years with a monthly payment of $113.24, could he borrow more or less than he is borrowing now? How much more or less?
I have to enter the problem into an excel spreadsheet like this one:
| Relevant Information |
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| Annual Interest Rate |
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| Periods Per Year |
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| Number of Years |
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| Needed Information |
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| Present Value |
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PV |
| Future Value |
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FV |
| Payment |
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PMT |
| Rate |
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RATE |
| Number of Periods |
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NPER |
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| Additional Calculations (if needed) |
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