(4) FIN302_Excel with answers_Loans and amortization table_Feb5 (3)
xlsx
School
Pennsylvania State University, World Campus *
*We aren’t endorsed by this school
Course
302
Subject
Finance
Date
Feb 20, 2024
Type
xlsx
Pages
35
Uploaded by MrPasser
Interest rate
5%
Options
Loan
1. No leverage
$0.00
2. Small leverage $60.00 (buy a car; use your money $40 + $60 loan)
3. Large leverage
$900.00 (buy 10 cars; use your money $100+ $900 loan)
1) No leverage Time
Action
Cash Flow
Cash Flow
Today (t=0)
Taking out a loan
$0
$0 =$B$3
Purchase a car
-$100
-$100 =-$G$1
Net cash flow today
-$100
-$100 =C9+C10
Repay the loan with interests
$0
$0 =-C9*(1+$B$1)
Sell the car 110
90
=G2
Net cash flow in one year
$110
$90 =C12+C13
Profit as % of initial investment
10.0%
-10.0% =(C14+C11)/-C11
2) Small leverage ($60 loan)
Time
Action
Cash Flow
Cash Flow
Today (t=0)
Taking out a loan
$60
$60 =$B$4
Purchase a car
-$100
-$100 =-$G$1
Net cash flow today
-$40
-$40 =C19+C20
Repay the loan with interests
-$63
-$63 =-C19*(1+$B$1)
Sell the car 110
90
=G2
Net cash flow in one year
$47
$27 =C23+C22
Profit as % of initial investment
17.5%
-32.5% =(C24+C21)/-C21
3) Large leverage ($900)
Time
Action
Cash Flow
Cash Flow
Today (t=0)
Taking out a loan
$900
$900 =$B$5
Purchase a car
-$1,000
-$1,000 =-10*$G$1
Net cash flow today
-$100
-$100 =C29+C30
Repay the loan with interests
-$945
-$945 =-C29*(1+$B$1)
Sell the car 1,100
900
=G2*10
Net cash flow in one year
$155
-$45 =C32+C33
Profit as % of initial investment
55.0%
-145.0% =(C34+C31)/-C31
One year from now (t=1)
One year from now (t=1)
One year from now (t=1)
Price (t=0)
$100
Price (t=1)
$110
$90
=$B$3
=-$G$1
=D9+D10
=-D9*(1+$B$1)
=H2
=D12+D13
=(D14+D11)/-D11
=$B$4
=-$G$1
=D19+D20
=-D19*(1+$B$1)
=H2
=D23+D22
=(D24+D21)/-D21
=$B$5
=-10*$G$1
=D29+D30
=-D29*(1+$B$1)
=H2*10
=D32+D33
=(D34+D31)/-D31
-200.0%
-150.0%
-100.0%
-50.0%
0.0%
50.0%
100.0%
Impact of Leverage Price in year 1=$110
Price in year 1=$
$90
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
AMORTIZATION TABLE: MORTGAGE (EQUAL PAYMENTS)
Loan amount
$ 100,000
Interest rate (APR)
8%
Term (in years)
10
Annual payment
$14,902.95 =PMT(B3,B4,-B2,,0)
Year
1
100,000.00
14,902.95
8,000.00
6,902.95
93,097.05
2
93,097.05
14,902.95
7,447.76
7,455.18
85,641.87
3
85,641.87
14,902.95
6,851.35
8,051.60
77,590.27
4
77,590.27
14,902.95
6,207.22
8,695.73
68,894.54
5
68,894.54
14,902.95
5,511.56
9,391.39
59,503.15
6
59,503.15
14,902.95
4,760.25
10,142.70
49,360.46
7
49,360.46
14,902.95
3,948.84
10,954.11
38,406.34
8
38,406.34
14,902.95
3,072.51
11,830.44
26,575.90
9
26,575.90
14,902.95
2,126.07
12,776.88
13,799.03
10
13,799.03
14,902.95
1,103.92
13,799.03
0.00
$77,590.27 =F10
$77,590.27 =PV(B3,10-3,-B5
$77,590.27 =NPV(B3,C11:C1
A. Loan balance at beginning of year
B. Total payment C. Interest payment
D. Principal repayment
E. Loan principal balance at end of year
ending balance at year 3=>
A
B
C
D
E
F
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
formulatext
=B2
=$B$5
=B8*$B$3
=C8-D8
=B8-E8
=F8
=$B$5
=B9*$B$3
=C9-D9
=B9-E9
=F9
=$B$5
=B10*$B$3
=C10-D10
=B10-E10
=F10
=$B$5
=B11*$B$3
=C11-D11
=B11-E11
=F11
=$B$5
=B12*$B$3
=C12-D12
=B12-E12
=F12
=$B$5
=B13*$B$3
=C13-D13
=B13-E13
=F13
=$B$5
=B14*$B$3
=C14-D14
=B14-E14
=F14
=$B$5
=B15*$B$3
=C15-D15
=B15-E15
=F15
=$B$5
=B16*$B$3
=C16-D16
=B16-E16
=F16
=$B$5
=B17*$B$3
=C17-D17
=B17-E17
5,,0)
17)
A. Loan balance at beginning of year
B. Total payment C. Interest payment
D. Principal repayment
E. Loan principal balance at end of year
1
2
3
4
5
6
7
8
9
10
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
100,000.00
$100,000 10 year equal payment loan at 8% E. Loan principal balance at end of year
B. Total payment C. Interest payment
D. Principal repayment
G
H
I
J
K
L
M
N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Loan amount
$ 100,000
8%
10
Year
1
$ 100,000.00
$8,000.00 $6,902.95 $14,902.95 $93,097.05 =B2
2
$93,097.05 $7,447.76 $7,455.18 $14,902.95 $85,641.87 =F7
3
$85,641.87 $6,851.35 $8,051.60 $14,902.95 $77,590.27 =F8
4
$77,590.27 $6,207.22 $8,695.73 $14,902.95 $68,894.54 =F9
5
$68,894.54 $5,511.56 $9,391.39 $14,902.95 $59,503.15 =F10
6
$59,503.15 $4,760.25 $10,142.70 $14,902.95 $49,360.46 =F11
7
$49,360.46 $3,948.84 $10,954.11 $14,902.95 $38,406.34 =F12
8
$38,406.34 $3,072.51 $11,830.44 $14,902.95 $26,575.90 =F13
9
$26,575.90 $2,126.07 $12,776.88 $14,902.95 $13,799.03 =F14
10
$13,799.03 $1,103.92 $13,799.03 $14,902.95 $ 0.00
=F15
MORTIZATION TABLE: MORTGAGE USING IPMT AND PPM
Interest rate (APR)
Loan period in years
Loan balance at beginning of year
Interest payment
Principal repayment
Total payments
Loan principal balance at end of year Loan balance at beginning of year
A
B
C
D
E
F
G
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
formulatext
Interest payment
=C7+D7
=B7-D7
=C8+D8
=B8-D8
=C9+D9
=B9-D9
=C10+D10=B10-D10
=C11+D11=B11-D11
=C12+D12=B12-D12
=C13+D13=B13-D13
=C14+D14=B14-D14
=C15+D15=B15-D15
=C16+D16=B16-D16
Principal repayment
Total payments
Loan principal balance at end of year =IPMT($B$3,A7,$
B$4,-$B$2,,0)
=PPMT($B$3,A7,$
B$4,-$B$2,,0)
=IPMT($B$3,A8,$
B$4,-$B$2,,0)
=PPMT($B$3,A8,$
B$4,-$B$2,,0)
=IPMT($B$3,A9,$
B$4,-$B$2,,0)
=PPMT($B$3,A9,$
B$4,-$B$2,,0)
=IPMT($B$3,A10,
$B$4,-$B$2,,0)
=PPMT($B$3,A10,
$B$4,-$B$2,,0)
=IPMT($B$3,A11,
$B$4,-$B$2,,0)
=PPMT($B$3,A11,
$B$4,-$B$2,,0)
=IPMT($B$3,A12,
$B$4,-$B$2,,0)
=PPMT($B$3,A12,
$B$4,-$B$2,,0)
=IPMT($B$3,A13,
$B$4,-$B$2,,0)
=PPMT($B$3,A13,
$B$4,-$B$2,,0)
=IPMT($B$3,A14,
$B$4,-$B$2,,0)
=PPMT($B$3,A14,
$B$4,-$B$2,,0)
=IPMT($B$3,A15,
$B$4,-$B$2,,0)
=PPMT($B$3,A15,
$B$4,-$B$2,,0)
=IPMT($B$3,A16,
$B$4,-$B$2,,0)
=PPMT($B$3,A16,
$B$4,-$B$2,,0)
H
I
J
K
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Loan amount
$150,000
Maturity (years)
5
Annual interest rate
10%
1) Annual payment
$39,569.62 =PMT(B3,B2,-B1,,0)
2)
Payment
1
150,000.00
$39,569.62 15000 $24,569.62 ###
2
$125,430.38 $39,569.62 12543.03779 $27,026.58 $98,403.79 3
$98,403.79 $39,569.62 9840.379355 $29,729.24 $68,674.55 4
$68,674.55 $39,569.62 6867.455079 $32,702.17 $35,972.38 5
$35,972.38 $39,569.62 3597.238374 $35,972.38 $0.00 3)
$68,674.55 =F10
$68,674.55 =PV(B3,B2-3,-B5,,0)
68,674.55 =NPV(B3,C11:C12)
4)
$32,702.17 =E11
$32,702.17 =PPMT(B3,4,B2,-B1,,0)
Loan beginning balance
Total payment Interest payment
Principal repayment
Loan ending balance
Outstanding balance at the end of year 3
From the amortization table we get
We can also calculate directly using PV
Fourth principal payment
From the amortization table we get
We can also calculate directly
A
B
C
D
E
F
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
$ Loan $150,000
Monthly payment
$2,000
2) 5th payment:
Term (years)
10
$748.31 1) interest rate
0.8511% =RATE(B3*12,-B2,B1,,0)
Interest payment
$1,251.69 => APR
10.21% =B4*12
Total payment
$2,000.00 Amortization table
Period
Total payment
1
150,000.00
1,276.63
723.37
2,000.00
149,276.63
2
149,276.63
1,270.47
729.53
2,000.00
148,547.11
3
148,547.11
1,264.27
735.73
2,000.00
147,811.37
4
147,811.37
1,258.00
742.00
2,000.00
147,069.38
5
147,069.38
1,251.69
748.31
2,000.00
146,321.07
6
146,321.07
1,245.32
754.68
2,000.00
145,566.39
7
145,566.39
1,238.90
761.10
2,000.00
144,805.28
8
144,805.28
1,232.42
767.58
2,000.00
144,037.70
9
144,037.70
1,225.89
774.11
2,000.00
143,263.59
10
143,263.59
1,219.30
780.70
2,000.00
142,482.89
11
142,482.89
1,212.65
787.35
2,000.00
141,695.54
12
141,695.54
1,205.95
794.05
2,000.00
140,901.50
13
140,901.50
1,199.20
800.80
2,000.00
140,100.69
14
140,100.69
1,192.38
807.62
2,000.00
139,293.07
15
139,293.07
1,185.51
814.49
2,000.00
138,478.58
16
138,478.58
1,178.57
821.43
2,000.00
137,657.15
17
137,657.15
1,171.58
828.42
2,000.00
136,828.73
18
136,828.73
1,164.53
835.47
2,000.00
135,993.27
19
135,993.27
1,157.42
842.58
2,000.00
135,150.69
20
135,150.69
1,150.25
849.75
2,000.00
134,300.94
21
134,300.94
1,143.02
856.98
2,000.00
133,443.96
22
133,443.96
1,135.72
864.28
2,000.00
132,579.68
23
132,579.68
1,128.37
871.63
2,000.00
131,708.05
24
131,708.05
1,120.95
879.05
2,000.00
130,829.00
25
130,829.00
1,113.47
886.53
2,000.00
129,942.47
26
129,942.47
1,105.92
894.08
2,000.00
129,048.40
27
129,048.40
1,098.31
901.69
2,000.00
128,146.71
28
128,146.71
1,090.64
909.36
2,000.00
127,237.35
29
127,237.35
1,082.90
917.10
2,000.00
126,320.25
30
126,320.25
1,075.10
924.90
2,000.00
125,395.35
31
125,395.35
1,067.22
932.78
2,000.00
124,462.57
32
124,462.57
1,059.29
940.71
2,000.00
123,521.86
33
123,521.86
1,051.28
948.72
2,000.00
122,573.14
34
122,573.14
1,043.20
956.80
2,000.00
121,616.34
35
121,616.34
1,035.06
964.94
2,000.00
120,651.40
36
120,651.40
1,026.85
973.15
2,000.00
119,678.25
37
119,678.25
1,018.57
981.43
2,000.00
118,696.82
38
118,696.82
1,010.21
989.79
2,000.00
117,707.03
Principal payment
Beginning loan balance
Interest payment
Principal payment
Ending loan balance
Microsoft Office User:
Is the interest rate reasonable? No! too high!
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
39
117,707.03
1,001.79
998.21
2,000.00
116,708.82
40
116,708.82
993.29
1,006.71
2,000.00
115,702.12
41
115,702.12
984.73
1,015.27
2,000.00
114,686.84
42
114,686.84
976.09
1,023.91
2,000.00
113,662.93
43
113,662.93
967.37
1,032.63
2,000.00
112,630.30
44
112,630.30
958.58
1,041.42
2,000.00
111,588.88
45
111,588.88
949.72
1,050.28
2,000.00
110,538.60
46
110,538.60
940.78
1,059.22
2,000.00
109,479.38
47
109,479.38
931.77
1,068.23
2,000.00
108,411.15
48
108,411.15
922.67
1,077.33
2,000.00
107,333.82
49
107,333.82
913.50
1,086.50
2,000.00
106,247.33
50
106,247.33
904.26
1,095.74
2,000.00
105,151.58
51
105,151.58
894.93
1,105.07
2,000.00
104,046.52
52
104,046.52
885.53
1,114.47
2,000.00
102,932.04
53
102,932.04
876.04
1,123.96
2,000.00
101,808.09
54
101,808.09
866.48
1,133.52
2,000.00
100,674.56
55
100,674.56
856.83
1,143.17
2,000.00
99,531.39
56
99,531.39
847.10
1,152.90
2,000.00
98,378.49
57
98,378.49
837.29
1,162.71
2,000.00
97,215.78
58
97,215.78
827.39
1,172.61
2,000.00
96,043.17
59
96,043.17
817.41
1,182.59
2,000.00
94,860.58
60
94,860.58
807.35
1,192.65
2,000.00
93,667.93
61
93,667.93
797.20
1,202.80
2,000.00
92,465.12
62
92,465.12
786.96
1,213.04
2,000.00
91,252.08
63
91,252.08
776.64
1,223.36
2,000.00
90,028.72
64
90,028.72
766.22
1,233.78
2,000.00
88,794.94
65
88,794.94
755.72
1,244.28
2,000.00
87,550.66
66
87,550.66
745.13
1,254.87
2,000.00
86,295.79
67
86,295.79
734.45
1,265.55
2,000.00
85,030.25
68
85,030.25
723.68
1,276.32
2,000.00
83,753.93
69
83,753.93
712.82
1,287.18
2,000.00
82,466.75
70
82,466.75
701.86
1,298.14
2,000.00
81,168.61
71
81,168.61
690.82
1,309.18
2,000.00
79,859.43
72
79,859.43
679.67
1,320.33
2,000.00
78,539.10
73
78,539.10
668.44
1,331.56
2,000.00
77,207.54
74
77,207.54
657.10
1,342.90
2,000.00
75,864.64
75
75,864.64
645.67
1,354.33
2,000.00
74,510.32
76
74,510.32
634.15
1,365.85
2,000.00
73,144.47
77
73,144.47
622.52
1,377.48
2,000.00
71,766.99
78
71,766.99
610.80
1,389.20
2,000.00
70,377.79
79
70,377.79
598.98
1,401.02
2,000.00
68,976.77
80
68,976.77
587.05
1,412.95
2,000.00
67,563.82
81
67,563.82
575.03
1,424.97
2,000.00
66,138.85
82
66,138.85
562.90
1,437.10
2,000.00
64,701.74
83
64,701.74
550.67
1,449.33
2,000.00
63,252.41
84
63,252.41
538.33
1,461.67
2,000.00
61,790.75
85
61,790.75
525.89
1,474.11
2,000.00
60,316.64
86
60,316.64
513.35
1,486.65
2,000.00
58,829.99
87
58,829.99
500.69
1,499.31
2,000.00
57,330.68
88
57,330.68
487.93
1,512.07
2,000.00
55,818.62
89
55,818.62
475.07
1,524.93
2,000.00
54,293.68
90
54,293.68
462.09
1,537.91
2,000.00
52,755.77
91
52,755.77
449.00
1,551.00
2,000.00
51,204.77
92
51,204.77
435.80
1,564.20
2,000.00
49,640.56
93
49,640.56
422.48
1,577.52
2,000.00
48,063.05
94
48,063.05
409.06
1,590.94
2,000.00
46,472.11
95
46,472.11
395.52
1,604.48
2,000.00
44,867.63
96
44,867.63
381.86
1,618.14
2,000.00
43,249.49
97
43,249.49
368.09
1,631.91
2,000.00
41,617.58
98
41,617.58
354.20
1,645.80
2,000.00
39,971.78
99
39,971.78
340.19
1,659.81
2,000.00
38,311.98
100
38,311.98
326.07
1,673.93
2,000.00
36,638.04
101
36,638.04
311.82
1,688.18
2,000.00
34,949.87
102
34,949.87
297.45
1,702.55
2,000.00
33,247.32
103
33,247.32
282.96
1,717.04
2,000.00
31,530.28
104
31,530.28
268.35
1,731.65
2,000.00
29,798.63
105
29,798.63
253.61
1,746.39
2,000.00
28,052.25
106
28,052.25
238.75
1,761.25
2,000.00
26,291.00
107
26,291.00
223.76
1,776.24
2,000.00
24,514.76
108
24,514.76
208.64
1,791.36
2,000.00
22,723.40
109
22,723.40
193.40
1,806.60
2,000.00
20,916.79
110
20,916.79
178.02
1,821.98
2,000.00
19,094.81
111
19,094.81
162.51
1,837.49
2,000.00
17,257.33
112
17,257.33
146.87
1,853.13
2,000.00
15,404.20
113
15,404.20
131.10
1,868.90
2,000.00
13,535.31
114
13,535.31
115.20
1,884.80
2,000.00
11,650.50
115
11,650.50
99.16
1,900.84
2,000.00
9,749.66
116
9,749.66
82.98
1,917.02
2,000.00
7,832.64
117
7,832.64
66.66
1,933.34
2,000.00
5,899.30
118
5,899.30
50.21
1,949.79
2,000.00
3,949.51
119
3,949.51
33.61
1,966.39
2,000.00
1,983.12
120
1,983.12
16.88
1,983.12
2,000.00
0.00
from amort.table
107,333.82 =F55
using PV function
$107,333.82 =PV(B4,(B3-4)*12,-B2,,0)
=SUM(F3:F4)
Formulatext
Interest payment
Principal payment
=B1
=B8*$B$4
=E8-C8
=$B$2
=B8-D8
=F8
=B9*$B$4
=E9-C9
=$B$2
=B9-D9
=F9
=B10*$B$4
=E10-C10
=$B$2
=B10-D10
=F10
=B11*$B$4
=E11-C11
=$B$2
=B11-D11
=F11
=B12*$B$4
=E12-C12
=$B$2
=B12-D12
=F12
=B13*$B$4
=E13-C13
=$B$2
=B13-D13
=F13
=B14*$B$4
=E14-C14
=$B$2
=B14-D14
=F14
=B15*$B$4
=E15-C15
=$B$2
=B15-D15
=F15
=B16*$B$4
=E16-C16
=$B$2
=B16-D16
=F16
=B17*$B$4
=E17-C17
=$B$2
=B17-D17
=F17
=B18*$B$4
=E18-C18
=$B$2
=B18-D18
=F18
=B19*$B$4
=E19-C19
=$B$2
=B19-D19
=F19
=B20*$B$4
=E20-C20
=$B$2
=B20-D20
=F20
=B21*$B$4
=E21-C21
=$B$2
=B21-D21
=F21
=B22*$B$4
=E22-C22
=$B$2
=B22-D22
=F22
=B23*$B$4
=E23-C23
=$B$2
=B23-D23
=F23
=B24*$B$4
=E24-C24
=$B$2
=B24-D24
=F24
=B25*$B$4
=E25-C25
=$B$2
=B25-D25
=F25
=B26*$B$4
=E26-C26
=$B$2
=B26-D26
=F26
=B27*$B$4
=E27-C27
=$B$2
=B27-D27
=F27
=B28*$B$4
=E28-C28
=$B$2
=B28-D28
=F28
=B29*$B$4
=E29-C29
=$B$2
=B29-D29
=F29
=B30*$B$4
=E30-C30
=$B$2
=B30-D30
=F30
=B31*$B$4
=E31-C31
=$B$2
=B31-D31
=F31
=B32*$B$4
=E32-C32
=$B$2
=B32-D32
=F32
=B33*$B$4
=E33-C33
=$B$2
=B33-D33
=F33
=B34*$B$4
=E34-C34
=$B$2
=B34-D34
=F34
=B35*$B$4
=E35-C35
=$B$2
=B35-D35
=F35
=B36*$B$4
=E36-C36
=$B$2
=B36-D36
=F36
=B37*$B$4
=E37-C37
=$B$2
=B37-D37
=F37
=B38*$B$4
=E38-C38
=$B$2
=B38-D38
=F38
=B39*$B$4
=E39-C39
=$B$2
=B39-D39
=F39
=B40*$B$4
=E40-C40
=$B$2
=B40-D40
=F40
=B41*$B$4
=E41-C41
=$B$2
=B41-D41
=F41
=B42*$B$4
=E42-C42
=$B$2
=B42-D42
=F42
=B43*$B$4
=E43-C43
=$B$2
=B43-D43
=F43
=B44*$B$4
=E44-C44
=$B$2
=B44-D44
=F44
=B45*$B$4
=E45-C45
=$B$2
=B45-D45
3) Outstanding balance after 4 years
=PPMT(B4,5,B3*1
2,-B1,,0)
=IPMT(B4,5,B3*12
,-B1,,0)
Beginning loan balance
Total payment
Ending loan balance
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
=F45
=B46*$B$4
=E46-C46
=$B$2
=B46-D46
=F46
=B47*$B$4
=E47-C47
=$B$2
=B47-D47
=F47
=B48*$B$4
=E48-C48
=$B$2
=B48-D48
=F48
=B49*$B$4
=E49-C49
=$B$2
=B49-D49
=F49
=B50*$B$4
=E50-C50
=$B$2
=B50-D50
=F50
=B51*$B$4
=E51-C51
=$B$2
=B51-D51
=F51
=B52*$B$4
=E52-C52
=$B$2
=B52-D52
=F52
=B53*$B$4
=E53-C53
=$B$2
=B53-D53
=F53
=B54*$B$4
=E54-C54
=$B$2
=B54-D54
=F54
=B55*$B$4
=E55-C55
=$B$2
=B55-D55
=F55
=B56*$B$4
=E56-C56
=$B$2
=B56-D56
=F56
=B57*$B$4
=E57-C57
=$B$2
=B57-D57
=F57
=B58*$B$4
=E58-C58
=$B$2
=B58-D58
=F58
=B59*$B$4
=E59-C59
=$B$2
=B59-D59
=F59
=B60*$B$4
=E60-C60
=$B$2
=B60-D60
=F60
=B61*$B$4
=E61-C61
=$B$2
=B61-D61
=F61
=B62*$B$4
=E62-C62
=$B$2
=B62-D62
=F62
=B63*$B$4
=E63-C63
=$B$2
=B63-D63
=F63
=B64*$B$4
=E64-C64
=$B$2
=B64-D64
=F64
=B65*$B$4
=E65-C65
=$B$2
=B65-D65
=F65
=B66*$B$4
=E66-C66
=$B$2
=B66-D66
=F66
=B67*$B$4
=E67-C67
=$B$2
=B67-D67
=F67
=B68*$B$4
=E68-C68
=$B$2
=B68-D68
=F68
=B69*$B$4
=E69-C69
=$B$2
=B69-D69
=F69
=B70*$B$4
=E70-C70
=$B$2
=B70-D70
=F70
=B71*$B$4
=E71-C71
=$B$2
=B71-D71
=F71
=B72*$B$4
=E72-C72
=$B$2
=B72-D72
=F72
=B73*$B$4
=E73-C73
=$B$2
=B73-D73
=F73
=B74*$B$4
=E74-C74
=$B$2
=B74-D74
=F74
=B75*$B$4
=E75-C75
=$B$2
=B75-D75
=F75
=B76*$B$4
=E76-C76
=$B$2
=B76-D76
=F76
=B77*$B$4
=E77-C77
=$B$2
=B77-D77
=F77
=B78*$B$4
=E78-C78
=$B$2
=B78-D78
=F78
=B79*$B$4
=E79-C79
=$B$2
=B79-D79
=F79
=B80*$B$4
=E80-C80
=$B$2
=B80-D80
=F80
=B81*$B$4
=E81-C81
=$B$2
=B81-D81
=F81
=B82*$B$4
=E82-C82
=$B$2
=B82-D82
=F82
=B83*$B$4
=E83-C83
=$B$2
=B83-D83
=F83
=B84*$B$4
=E84-C84
=$B$2
=B84-D84
=F84
=B85*$B$4
=E85-C85
=$B$2
=B85-D85
=F85
=B86*$B$4
=E86-C86
=$B$2
=B86-D86
=F86
=B87*$B$4
=E87-C87
=$B$2
=B87-D87
=F87
=B88*$B$4
=E88-C88
=$B$2
=B88-D88
=F88
=B89*$B$4
=E89-C89
=$B$2
=B89-D89
=F89
=B90*$B$4
=E90-C90
=$B$2
=B90-D90
=F90
=B91*$B$4
=E91-C91
=$B$2
=B91-D91
=F91
=B92*$B$4
=E92-C92
=$B$2
=B92-D92
=F92
=B93*$B$4
=E93-C93
=$B$2
=B93-D93
=F93
=B94*$B$4
=E94-C94
=$B$2
=B94-D94
=F94
=B95*$B$4
=E95-C95
=$B$2
=B95-D95
=F95
=B96*$B$4
=E96-C96
=$B$2
=B96-D96
=F96
=B97*$B$4
=E97-C97
=$B$2
=B97-D97
=F97
=B98*$B$4
=E98-C98
=$B$2
=B98-D98
=F98
=B99*$B$4
=E99-C99
=$B$2
=B99-D99
=F99
=B100*$B$4
=E100-C100
=$B$2
=B100-D100
=F100
=B101*$B$4
=E101-C101
=$B$2
=B101-D101
=F101
=B102*$B$4
=E102-C102
=$B$2
=B102-D102
=F102
=B103*$B$4
=E103-C103
=$B$2
=B103-D103
=F103
=B104*$B$4
=E104-C104
=$B$2
=B104-D104
=F104
=B105*$B$4
=E105-C105
=$B$2
=B105-D105
=F105
=B106*$B$4
=E106-C106
=$B$2
=B106-D106
=F106
=B107*$B$4
=E107-C107
=$B$2
=B107-D107
=F107
=B108*$B$4
=E108-C108
=$B$2
=B108-D108
=F108
=B109*$B$4
=E109-C109
=$B$2
=B109-D109
=F109
=B110*$B$4
=E110-C110
=$B$2
=B110-D110
=F110
=B111*$B$4
=E111-C111
=$B$2
=B111-D111
=F111
=B112*$B$4
=E112-C112
=$B$2
=B112-D112
=F112
=B113*$B$4
=E113-C113
=$B$2
=B113-D113
=F113
=B114*$B$4
=E114-C114
=$B$2
=B114-D114
=F114
=B115*$B$4
=E115-C115
=$B$2
=B115-D115
=F115
=B116*$B$4
=E116-C116
=$B$2
=B116-D116
=F116
=B117*$B$4
=E117-C117
=$B$2
=B117-D117
=F117
=B118*$B$4
=E118-C118
=$B$2
=B118-D118
=F118
=B119*$B$4
=E119-C119
=$B$2
=B119-D119
=F119
=B120*$B$4
=E120-C120
=$B$2
=B120-D120
=F120
=B121*$B$4
=E121-C121
=$B$2
=B121-D121
=F121
=B122*$B$4
=E122-C122
=$B$2
=B122-D122
=F122
=B123*$B$4
=E123-C123
=$B$2
=B123-D123
=F123
=B124*$B$4
=E124-C124
=$B$2
=B124-D124
=F124
=B125*$B$4
=E125-C125
=$B$2
=B125-D125
=F125
=B126*$B$4
=E126-C126
=$B$2
=B126-D126
=F126
=B127*$B$4
=E127-C127
=$B$2
=B127-D127
Loan amount
$ 100,000
8%
Term (in years)
10
1)
Year
Ending balance
1
100,000.00
10,000.00
8,000.00
18,000.00
90,000.00
2
90,000.00
10,000.00
7,200.00
17,200.00
80,000.00
3
80,000.00
10,000.00
6,400.00
16,400.00
70,000.00
4
70,000.00
10,000.00
5,600.00
15,600.00
60,000.00
5
60,000.00
10,000.00
4,800.00
14,800.00
50,000.00
6
50,000.00
10,000.00
4,000.00
14,000.00
40,000.00
7
40,000.00
10,000.00
3,200.00
13,200.00
30,000.00
8
30,000.00
10,000.00
2,400.00
12,400.00
20,000.00
9
20,000.00
10,000.00
1,600.00
11,600.00
10,000.00
10
10,000.00
10,000.00
800.00
10,800.00
0.00
2) What is the ending loan balance afteer 3rd payment?
w/ amort.table
70,000.00 =F9
wo amort.table
$ 70,000 =B2-3*(B2/B4)
3) What are the 9th principal, interest, and total repayment?
w/ amort.table
$ 10,000
$ 1,600
$ 11,600 =C15
=D15
=E15
wo amort.table
$ 10,000
$ 1,600
$ 11,600 =B2/B4
=(B2-8*B2/B4)*B3
=B25+C25
Amortization Table: $100,000 10 year, 8% Equal Amortization Term
loan
Interest rate (APR)
Beginning balance Principal repayment
Interest payment
Total payment
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
1
2
3
4
5
6
7
8
9
10
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
90,000.00
100,000.00
$100,000 8%, 10 YEAR LOAN ENDIG BALANCES
Equal amortization teerm loan
Equal payment loan
AMORTIZATION TABLE: INTEREST-ONLY LOAN
Loan amount
$ 100,000
Interest rate (APR)
8%
Term (in years)
10
Year
1
$100,000
$0
$8,000
$8,000
$100,000 =B2
2
$100,000
$0
$8,000
$8,000
$100,000 =F7
3
$100,000
$0
$8,000
$8,000
$100,000 =F8
4
$100,000
$0
$8,000
$8,000
$100,000 =F9
5
$100,000
$0
$8,000
$8,000
$100,000 =F10
6
$100,000
$0
$8,000
$8,000
$100,000 =F11
7
$100,000
$0
$8,000
$8,000
$100,000 =F12
8
$100,000
$0
$8,000
$8,000
$100,000 =F13
9
$100,000
$0
$8,000
$8,000
$100,000 =F14
10
$100,000
$100,000
$8,000
$108,000
$0
=F15
2) What is the ending loan balance after 3rd payment?
w/ amort.table
100,000.00 =F9
wo amort.table
$ 100,000 =B2
3) What are the 9th principal, interest, and total repayment?
w/ amort.table
$ 0
$ 8,000
$ 8,000 =C15
=D15
=E15
wo amort.table
$ 0
$ 8,000
$ 8,000
#N/A =B2*B3
=B24+C24
Beginning balance
Principal repayment
Interest payment
Total payment
Ending balance
Beginning balance
Microsoft Office User:
set this to equal to the beg.balance of the last period
formulatext
#N/A =B7*$B$3
=D7+C7
=B7-C7
#N/A =B8*$B$3
=D8+C8
=B8-C8
#N/A =B9*$B$3
=D9+C9
=B9-C9
#N/A =B10*$B$3
=D10+C10
=B10-C10
#N/A =B11*$B$3
=D11+C11
=B11-C11
#N/A =B12*$B$3
=D12+C12
=B12-C12
#N/A =B13*$B$3
=D13+C13
=B13-C13
#N/A =B14*$B$3
=D14+C14
=B14-C14
#N/A =B15*$B$3
=D15+C15
=B15-C15
=B16
=B16*$B$3
=D16+C16
=B16-C16
Principal repayment
Interest payment
Total payment
Ending balance
1
2
3
4
5
6
7
8
9
10
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$100,000, 8%, 10 year interest-only loan
Principal repayment
Interest payment
Ending balance
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Loan
$10,000 6%
Month
1
10,000.00
0.00
50.00
50.00
10,000.00 =B1 #N/A
2
10,000.00
0.00
50.00
50.00
10,000.00 =F5 #N/A
3
10,000.00
0.00
50.00
50.00
10,000.00 =F6 #N/A
4
10,000.00
0.00
50.00
50.00
10,000.00 =F7 #N/A
5
10,000.00
0.00
50.00
50.00
10,000.00 =F8 #N/A
6
10,000.00
0.00
50.00
50.00
10,000.00 =F9 #N/A
7
10,000.00
0.00
50.00
50.00
10,000.00 =F10 #N/A
8
10,000.00
0.00
50.00
50.00
10,000.00 =F11 #N/A
9
10,000.00
0.00
50.00
50.00
10,000.00 =F12 #N/A
10
10,000.00
0.00
50.00
50.00
10,000.00 =F13 #N/A
11
10,000.00
0.00
50.00
50.00
10,000.00 =F14 #N/A
12
10,000.00
0.00
50.00
50.00
10,000.00 =F15 #N/A
13
10,000.00
0.00
50.00
50.00
10,000.00 =F16 #N/A
14
10,000.00
0.00
50.00
50.00
10,000.00 =F17 #N/A
15
10,000.00
0.00
50.00
50.00
10,000.00 =F18 #N/A
16
10,000.00
0.00
50.00
50.00
10,000.00 =F19 #N/A
17
10,000.00
0.00
50.00
50.00
10,000.00 =F20 #N/A
18
10,000.00
0.00
50.00
50.00
10,000.00 =F21 #N/A
19
10,000.00
0.00
50.00
50.00
10,000.00 =F22 #N/A
20
10,000.00
0.00
50.00
50.00
10,000.00 =F23 #N/A
21
10,000.00
0.00
50.00
50.00
10,000.00 =F24 #N/A
22
10,000.00
0.00
50.00
50.00
10,000.00 =F25 #N/A
23
10,000.00
0.00
50.00
50.00
10,000.00 =F26 #N/A
24
10,000.00
10,000.00
50.00
10,050.00
0.00 =F27 =B28 Interest rate (APR)
Beginning balance
Principal repayment
Interest payment
Total payment
Ending balance
=B5*$B$2/12 =D5+C5 =B5-C5 =B6*$B$2/12 =D6+C6 =B6-C6 =B7*$B$2/12 =D7+C7 =B7-C7 =B8*$B$2/12 =D8+C8 =B8-C8 =B9*$B$2/12 =D9+C9 =B9-C9 =B10*$B$2/12 =D10+C10 =B10-C10 =B11*$B$2/12 =D11+C11 =B11-C11 =B12*$B$2/12 =D12+C12 =B12-C12 =B13*$B$2/12 =D13+C13 =B13-C13 =B14*$B$2/12 =D14+C14 =B14-C14 =B15*$B$2/12 =D15+C15 =B15-C15 =B16*$B$2/12 =D16+C16 =B16-C16 =B17*$B$2/12 =D17+C17 =B17-C17 =B18*$B$2/12 =D18+C18 =B18-C18 =B19*$B$2/12 =D19+C19 =B19-C19 =B20*$B$2/12 =D20+C20 =B20-C20 =B21*$B$2/12 =D21+C21 =B21-C21 =B22*$B$2/12 =D22+C22 =B22-C22 =B23*$B$2/12 =D23+C23 =B23-C23 =B24*$B$2/12 =D24+C24 =B24-C24 =B25*$B$2/12 =D25+C25 =B25-C25 =B26*$B$2/12 =D26+C26 =B26-C26 =B27*$B$2/12 =D27+C27 =B27-C27 =B28*$B$2/12 =D28+C28 =B28-C28
Loan amount
$ 100,000
8%
Term (in years)
10
Annual payment
$ 6,000
Year
1
100,000.00
-2,000.00
8,000.00
6,000.00
102,000.00 =B2
2
102,000.00
-2,160.00
8,160.00
6,000.00
104,160.00 =F7
3
104,160.00
-2,332.80
8,332.80
6,000.00
106,492.80 =F8
4
106,492.80
-2,519.42
8,519.42
6,000.00
109,012.22 =F9
5
109,012.22
-2,720.98
8,720.98
6,000.00
111,733.20 =F10
6
111,733.20
-2,938.66
8,938.66
6,000.00
114,671.86 =F11
7
114,671.86
-3,173.75
9,173.75
6,000.00
117,845.61 =F12
8
117,845.61
-3,427.65
9,427.65
6,000.00
121,273.26 =F13
9
121,273.26
-3,701.86
9,701.86
6,000.00
124,975.12 =F14
10
124,975.12
124,975.12
9,998.01
134,973.12
0.00 =F15
2) What is the ending loan balance after 3rd payment?
w/ amort.table
106,492.80 =F9
wo amort.table
3) What are the 9th principal, interest, and total repayment?
w/ amort.table
$ -3,702
$ 9,702
$ 6,000 =C15
=D15
=E15
wo amort.table
$ 6,000
#N/A
#N/A =B5
AMORTIZATION TABLE: BALLOON LOAN
Some or all of the principal repayments are negative
Interest rate (APR)
Beginning balance
Principal repayment
Interest payment
Total payment
Ending balance
Beginnin
g balance
not easy to answer without the amort. table
not easy to answer without the amort. table
not easy to answer without the amort. table
Microsoft Office User:
Should be equal to the beginning balance at the last period Microsoft Office User:
It is determined after computing the interest principal repayments
A
B
C
D
E
F
G
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
FORMULATEXT
=E7-D7
=B7*$B$3
=$B$5
=B7-C7
=E8-D8
=B8*$B$3
=$B$5
=B8-C8
=E9-D9
=B9*$B$3
=$B$5
=B9-C9
=E10-D10
=B10*$B$3
=$B$5
=B10-C10
=E11-D11
=B11*$B$3
=$B$5
=B11-C11
=E12-D12
=B12*$B$3
=$B$5
=B12-C12
=E13-D13
=B13*$B$3
=$B$5
=B13-C13
=E14-D14
=B14*$B$3
=$B$5
=B14-C14
=E15-D15
=B15*$B$3
=$B$5
=B15-C15
=B16
=B16*$B$3
=C16+D16=B16-C16
Principal repayment
Interest payment
Total payment
Ending balance
1
2
3
4
5
6
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
140,000.00
Ending balances of $100,000 1
Ballon loan Inter
Equal payment loan
Equa
and H
I
J
K
L
M
N
O
P
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
7
8
9
10
10 year, 8% loan
rest only loan
al Amort.term loan
Q
R
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
AMORTIZATION TABLE: BULLET LOAN
Loan amount
$100,000.00
Interest rate (APR)
8%
Term (in years)
10
Year
1
$100,000.00
-$8,000.00
$8,000.00
$0.00 $108,000.00 =B2
2
$108,000.00
-$8,640.00
$8,640.00
$0.00 $116,640.00 =F7
3
$116,640.00
-$9,331.20
$9,331.20
$0.00 $125,971.20 =F8
4
$125,971.20
-$10,077.70
$10,077.70
$0.00 $136,048.90 =F9
5
$136,048.90
-$10,883.91
$10,883.91
$0.00 $146,932.81 =F10
6
$146,932.81
-$11,754.62
$11,754.62
$0.00 $158,687.43 =F11
7
$158,687.43
-$12,694.99
$12,694.99
$0.00 $171,382.43 =F12
8
$171,382.43
-$13,710.59
$13,710.59
$0.00 $185,093.02 =F13
9
$185,093.02
-$14,807.44
$14,807.44
$0.00 $199,900.46 =F14
10
$199,900.46
$199,900.46
$15,992.04
$215,892.50
$0.00 =F15
$ 215,892.50 =B2*(1+B3)^B4
2) What is the ending loan balance after 3rd payment?
w/ amort.table
$125,971.20 =F9
wo amort.table
$125,971.20 =B2*(1+B3)^3
3) What are the 9th principal, interest, and total repayment?
w/ amort.table
-$14,807.44
$14,807.44
$0.00 =C15
=D15
#N/A
wo amort.table
$0.00
#N/A
#N/A
#N/A
Beginning balance
Principal repayment
Interest payment
Total payment
Ending balance
Beginning balance
not easy without the amort. table
not easy without the amort. table
$
$1
$1
$2
$2
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
FORMULATEXT
=E7-D7
=B7*$B$3
#N/A =B7-C7
=E8-D8
=B8*$B$3
#N/A =B8-C8
=E9-D9
=B9*$B$3
#N/A =B9-C9
=E10-D10
=B10*$B$3
#N/A =B10-C10
=E11-D11
=B11*$B$3
#N/A =B11-C11
=E12-D12
=B12*$B$3
#N/A =B12-C12
=E13-D13
=B13*$B$3
#N/A =B13-C13
=E14-D14
=B14*$B$3
#N/A =B14-C14
=E15-D15
=B15*$B$3
#N/A =B15-C15
=B16
=B16*$B$3
=C16+D16
=B16-C16
Principal repayment
Interest payment
Total payment
Ending balance
1
2
3
4
5
6
7
8
9
10
$0.00
$50,000.00
100,000.00
150,000.00
200,000.00
250,000.00
Ending balances of $100,000, 10 year, 8% loan
Bullet loan
Balloon loan with $6000 payment
Interest only loan
Equal payment loan
Equal amot.term loan
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Original loan: 10 years, 8%, interest-only loan
New loan: 8 years, 5%, intere
$ Loan
$100,000
Refinancing costs
$10,000
Interest rate (APR)
Term (in years)
Term (in years)
$ New loan
Original loan: Amortization table, years 1-10
Year
Total payment
1
2
3
4
5
6
7
8
9
10
New loan: Amortization table, years 3-10
Year
Total payment
3
4
5
6
7
8
9
10
Confirming the refinancing gain
Year
Gain
REFINANCING THE INTEREST ONLY LOAN
End of year 2, refinancing costs: $10,000
Interest rate (APR)
Contractual value
at the end of year 2
Market value at the end of year 2
Gain from refinancing
Beginning balance
Principal repayment
Interest payment
Ending balance
Beginning balance
Principal repayment
Interest payment
Ending balance
Payment on original loan
Payment on new loan
A
B
C
D
E
F
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
3
4
5
6
7
8
9
10
Potential refinancing gain
A
B
C
D
E
F
38
39
40
41
42
43
44
45
46
47
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
est-only loan
Beginning balance
Principal repayme
nt
Interest payment
Total payment
Ending balance
Beginning balance
Principal repayme
nt
Interest payment
Total payment
Ending balance
Microsoft Office User:
Market value at the end of year 2
= PV of all remaining total payments from year 3 to year 10
G
H
I
J
K
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
$ Loan
Refinancing costs
Interest rate (APR)
Interest rate (APR)
Term (in years)
Term (in years)
$ New loan
Gain from refinancing
Original loan: Amortization table, years 1-10
Year
Total payment
1
2
3
4
5
6
7
8
9
10
New loan: Amortization table, years 3-10
Year
Total payment
3
4
5
6
7
8
9
10
Confirming the refinancing gain
Year
Gain
REFINANCING THE BALLOON LOAN End of year 2, refinancing costs: $10,000
Original loan: 10 years, 8%, balloon loan, 3,000 annual payment
New loan: 8 years, Contractual value
at the end of year 2
Market value at the end of year 2
Beginning balance
Principal repayment
Interest payment
Beginning balance
Principal repayment
Interest payment
Payment on original loan
Payment on new loan
A
B
C
D
E
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
3
4
5
6
7
8
9
10
Refinancing gain
A
B
C
D
E
38
39
40
41
42
43
44
45
46
47
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Ending balance
Ending balance
5%, balloon loan, $3,000 annual payment
Beginning balance
Principal repayme
nt
Interest payment
Total payment
Ending balance
Beginning balance
Principal repayme
nt
Interest payment
Total payment
Ending balance
Microsoft Office User:
Market value at the end of year 2
= PV of all remaining total payments from year 3 to year 10
F
G
H
I
J
K
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
F
G
H
I
J
K
38
39
40
41
42
43
44
45
46
47
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Refinancing the equal payment term loan at the end of year New loan: 8 years, Equal payme
$ Loan
Refinancing costs
Interest rate (APR)
Interest rate (APR)
Term (in years)
Term (in years)
$ New loan
Gain from refinancing
Old equal payment term loan for 10 years at 8%
Year
Total payment
1
2
3
4
5
6
7
8
9
10
Year
Total payment
3
4
5
6
7
8
9
10
Saving each year for the remaining 8 years
Year
annual savings
3
4
5
6
7
8
9
10
Original loan: 10 years, Equal payment loan at 8%
Contractual value
at the end of year 2
Market value at the end of year 2
Beginning balance
Principal repayment
Interest payment
Ending balance
New equal payment term loan for the remaining 8 years at 5%
Beginning balance
Principal repayment
Interest payment
Ending balance
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Gain from refinancing =>
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
2
ent loan at 5%
Total payment
Total payment
Beginning balance
Principal repayment
Interest payment
Ending balance
Beginning balance
Principal repayment
Interest payment
Ending balance
Microsoft Office User:
Market value at the end of year 2
= PV of all remaining total payments from year 3 to year 10
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Documents
Related Questions
Business Math
Worksheet 8.2: Installment loans-Amount Financed Name
Background: An installment loan is repaid in several equal payments over a specified period of time.
Usually, you make a down payment to cover a portion of the cash price of the item. The amount you
finance is the portion of the cash price that you owe after making the down payment.
Amount Financed = Cash Price - Down Payment
Down Payment = Cash Price x Percent
1. Flora Quinton is buying a new air compressor for her auto repair shop. It sells
for $1,299. She makes a down payment of $199 and finances the remainder.
How much does she finance?
2. Beatriz Ruiz is buying new office furniture. It sells for a cash price of
$2,358.60. The down payment is $200.00. What is the amount financed
3. An office remodeling project costs $15,880. If you pay $3,680 towards the
project, how much do you finance?
arrow_forward
Pls choose right answers no need explanation
arrow_forward
Fast pls solve this question correctly in 5 min pls I will give u like for sure
Surbh
arrow_forward
Part AUsing the following free cash flows and cost of equity = 7%, discount FCF year 1 back to time 0 (today).
FCF year 1 = 500; FCF year 2 = 520; FCF year 3 = 560; FCF year 4 = 590; FCF year 5 = 610
a) 429.36
b) 467.29
c) 512.85
d) 422.10Part B
Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, discount the year 4 expected payment back to time 0 (today).
Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0
a) 9.31
b) 10.11
c) 13.65
d) 6.50
arrow_forward
Need help with 4,5,6.
arrow_forward
Note: Hand written solution is not accepted.
arrow_forward
Fisher Equation: Nominal, Real, and Inflation
=
10%. Expected inflation is E(T) =
Q1) You lend money to a business colleague at a rate of i
3.5%. What is your real rate of return r? Use the exact Fisher Equation.
=
Q2) How much would you charge a colleague on a loan of $100 if you want your real rate or
return to be r = 6% and the expected inflation is E(л) = 4%. E.g., what is the nominal rate i?
Use the exact Fisher Equation.
Q3) A corporate bond pays investors both a fixed and variable rate of return. The fixed rate is
constitutes the real return which is r = 4.5%. The variable rate is indexed to the CPI and is to
compensate investors for inflation. If the expected inflation in the next year is E(T) = 2.5%,
what is the nominal rate of return i the company will have to pay?
Enter your answer in the table below in the cells colored in yellow.
You must show all work to receive credit.
Q1) r=
|Q2) i=
||Q3) i=
Answer
arrow_forward
Fast pls solve this question correctly in 5 min pls I will give u like for sure
Surbh
arrow_forward
Suppose you are offered $7,100 today but must make the following payments:
1
2
Cash Flows ($)
O $7,100
1-3,800
2-2,500
3 -1,600
4 -1,400
Year
4
6.
7
9.
10
11
What is the IRR of this offer? (Do not round intermediate calculations. Enter your ans
12
a.
13
14
15
16
17
b.
If the appropriate discount rate is 10 percent, should you accept this offer?
18
19
multiple choice 1
20
21
Reject
Ассept
22
23
24
25
C.
If the appropriate discount rate is 19 percent, should you accept this offer?
26
27
multiple choice 2
28
29
Аcсept
Reject
30
31
32
33
What is the NPV of the offer if the appropriate discount rate is 10 percent? (A negative ar
What is the NPV of the offer if the appropriate discount rate is 19 percent? (A negative ar
34
d-1.
35
d-2.
36
arrow_forward
I need help with this problem question
arrow_forward
Fast pls solve this question correctly in 5 min pls I will give u like for sure
Surbh
You are considering the following fixed interest rate mortgage loan alternatives: Alternative 1: $180,000 initial loan balance 4.00% annual nominal interest rate 30-year amortization schedule $859.35 monthly loan payment Alternative 2: $195,000 initial loan balance 4.25% annual nominal interest rate 30-year amortization schedule $959.28
What is incremental cost of borrowing the additional $15,000? 0.58% 4.25% 5.8% Correct! 7.01%?
arrow_forward
mni.4
arrow_forward
Question E5-2
arrow_forward
f5
arrow_forward
Hi, can someone help me with these excel problems?
arrow_forward
►
CRC Inc. is buying new equipment that has the following cash flows:
Year
Cash Flow
O-$17.7
What is the NPV if the interest rate is $6%?
O $482.24
D -$537.78
0
-$500
O $22.44
1
$100
2
$200
3
$250
arrow_forward
Please help with questions
arrow_forward
Suppose that you have two loan choices with monthly payments
Choice
Loan Amount
Term (years)
Interest Rate
1
$
250,000
30
5%
2
$
220,000
30
4.50%
(a)
What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you
hold the loan for the entire term and there are no origination costs for the two loans?
Incremental Borrowing Cost: $3,254.72
(b)
What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you
hold the loan for only 6 years (72 months) and there are no origination costs for the
two loans?
Incremental Borrowing Cost: $650.94
arrow_forward
Please solve max please in 15-22 minutes and no reject thank u. Im needed please no reject
arrow_forward
Solve this financial accounting problem without use Ai
arrow_forward
your assumption and write it on the submitted file. [example: sa
interest rate or years are not mentioned. you assume any value, do your problem, write your assumptions/answer on
work paper.
Question 1
You have $2,000 to invest, the MARR would be at least what you need pay for borrowing $2000
True
OFalse
MacBook Pro
F6
F4
FS
F2
F3
%23
24
%
2
3
4
5
arrow_forward
A
B
C
D
E
F
G
H
1 You are interested in purchasing a $17,999 new car. You are weighing your
2 options regarding down payment and payment schedule. Your credit score
3 indicates that you can secure a loan with a 5.9% interest rate for a 5-year loan.
The facts are summarized below.
Car Price
Down Payment
4
5
$
6
7
Annual Interest Rate:
8
Loan years
9
17,999
10%
5.90%
5
10 Answer the questions below.
11
12 1. If you pay 10% as a down payment (so only need to borrow 90% of the car
13 price), use an EXCEL formulas and functions to complete the following table
14 assuming you make ANNUAL payments.
Payment amount:
15
16
17
18
Total interest:
Total repayment:
Format with $, and as a positive number
# of payments X Payment amount
Total repayments - amount borrowed
19
20
21 2. If you pay 10% as a down payment (so only need to borrow 90% of the car
22 price), use an EXCEL formulas and functions to complete the following table
23 assuming you make MONTHLY payments.
24
25
Payment amount:
26
Total…
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education
Related Questions
- Business Math Worksheet 8.2: Installment loans-Amount Financed Name Background: An installment loan is repaid in several equal payments over a specified period of time. Usually, you make a down payment to cover a portion of the cash price of the item. The amount you finance is the portion of the cash price that you owe after making the down payment. Amount Financed = Cash Price - Down Payment Down Payment = Cash Price x Percent 1. Flora Quinton is buying a new air compressor for her auto repair shop. It sells for $1,299. She makes a down payment of $199 and finances the remainder. How much does she finance? 2. Beatriz Ruiz is buying new office furniture. It sells for a cash price of $2,358.60. The down payment is $200.00. What is the amount financed 3. An office remodeling project costs $15,880. If you pay $3,680 towards the project, how much do you finance?arrow_forwardPls choose right answers no need explanationarrow_forwardFast pls solve this question correctly in 5 min pls I will give u like for sure Surbharrow_forward
- Part AUsing the following free cash flows and cost of equity = 7%, discount FCF year 1 back to time 0 (today). FCF year 1 = 500; FCF year 2 = 520; FCF year 3 = 560; FCF year 4 = 590; FCF year 5 = 610 a) 429.36 b) 467.29 c) 512.85 d) 422.10Part B Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, discount the year 4 expected payment back to time 0 (today). Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 9.31 b) 10.11 c) 13.65 d) 6.50arrow_forwardNeed help with 4,5,6.arrow_forwardNote: Hand written solution is not accepted.arrow_forward
- Fisher Equation: Nominal, Real, and Inflation = 10%. Expected inflation is E(T) = Q1) You lend money to a business colleague at a rate of i 3.5%. What is your real rate of return r? Use the exact Fisher Equation. = Q2) How much would you charge a colleague on a loan of $100 if you want your real rate or return to be r = 6% and the expected inflation is E(л) = 4%. E.g., what is the nominal rate i? Use the exact Fisher Equation. Q3) A corporate bond pays investors both a fixed and variable rate of return. The fixed rate is constitutes the real return which is r = 4.5%. The variable rate is indexed to the CPI and is to compensate investors for inflation. If the expected inflation in the next year is E(T) = 2.5%, what is the nominal rate of return i the company will have to pay? Enter your answer in the table below in the cells colored in yellow. You must show all work to receive credit. Q1) r= |Q2) i= ||Q3) i= Answerarrow_forwardFast pls solve this question correctly in 5 min pls I will give u like for sure Surbharrow_forwardSuppose you are offered $7,100 today but must make the following payments: 1 2 Cash Flows ($) O $7,100 1-3,800 2-2,500 3 -1,600 4 -1,400 Year 4 6. 7 9. 10 11 What is the IRR of this offer? (Do not round intermediate calculations. Enter your ans 12 a. 13 14 15 16 17 b. If the appropriate discount rate is 10 percent, should you accept this offer? 18 19 multiple choice 1 20 21 Reject Ассept 22 23 24 25 C. If the appropriate discount rate is 19 percent, should you accept this offer? 26 27 multiple choice 2 28 29 Аcсept Reject 30 31 32 33 What is the NPV of the offer if the appropriate discount rate is 10 percent? (A negative ar What is the NPV of the offer if the appropriate discount rate is 19 percent? (A negative ar 34 d-1. 35 d-2. 36arrow_forward
- I need help with this problem questionarrow_forwardFast pls solve this question correctly in 5 min pls I will give u like for sure Surbh You are considering the following fixed interest rate mortgage loan alternatives: Alternative 1: $180,000 initial loan balance 4.00% annual nominal interest rate 30-year amortization schedule $859.35 monthly loan payment Alternative 2: $195,000 initial loan balance 4.25% annual nominal interest rate 30-year amortization schedule $959.28 What is incremental cost of borrowing the additional $15,000? 0.58% 4.25% 5.8% Correct! 7.01%?arrow_forwardmni.4arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education