CORNELL NOTES
EQ:
HOW DO WE CALCULATE TOTAL INTEREST AND PAYMENT ON A LOAN
Learning Target:
I will use the PAYMENT FUNCTION in Excel to help determine my total payback on a Loan
Assessment:
LOAN AMORTIZATION TEMPLATE
THE PAYMENT FUNCTION is
PMT(rate,nper,pv,fv,type), where: rate = interest rate of the loan nper = total number of payments for the loan pv = present value or principal fv = future value or cash value attained after last payment has been made type = indicates when payments are due - 0, when payments are due at the end of the period - 1, when payments are due at the beginning of the period ABSOLUTE CELL REFERENCE In Excel an absolute reference is needed so that when we pull down a cell to copy a formula in each a cell the the absolute referenced cell will remain the same as the other cell references change. Ex: =C4 + D4 If we pull this formula down to each cell in a colum the formula changes numbers based on the location of the cell With Absolute Reference shown as : =C4 + D$4 the coordinate with the dollar sign stays the same while the other cell reference "C4" will chande to C5, C6 as you pull down. |
NOTES
An amortized loan is a loan with scheduled periodic payments of both principal and interest.
A loan amortization schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprises each payment so that the loan will be paid off at the end of its term. In order to calculate the payment amount for each period, we must know the principal, annual interest rate, the total number of payments, and whether payments are due at the beginning or end of the period. The payment function can be used to calculate the payment amount of each period. Vertical Divider
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Activity 1: Absolute Value Reference
![](http://www.weebly.com/weebly/images/file_icons/xls.png)
absolut_value.xlsx | |
File Size: | 24 kb |
File Type: | xlsx |
Activity 2:
Loan Amortization Table
![](http://www.weebly.com/weebly/images/file_icons/xls.png)
loan-table_1.xlsx | |
File Size: | 45 kb |
File Type: | xlsx |