Homework after TV-Loan:
Above is a screenshot of what we did in class, the TV loan without making payments for 1 year.
(1) Delete the entries in cells B2:D13. (The part of the table I highlighted in the screen shot).
(2) Think about how to include payments at the end of each month (after interest has been
added!)
In the section about the loan at the top right, create a cell which will contain a monthly
payment. (maybe that cell is G7. In that case, write “monthly payment” into cell F7).
(3) Now re-do the Loan Table, so that the monthly payments are included when the end of
month balance is calculated. (It may be easiest to erase all of the numbers in the table,
and start over. The goal is that you can fill down the whole table.
(4) Why does the monthly payment have to be AT LEAST the interest for the first month?
What happens if your payment is equal to the first month’s interest? Enter $10 as
monthly payment and see!
(5) Now think about this: How much would you have to pay monthly to pay back the loan in
the allowed time (the term of the loan) if there were NO INTEREST? Why will the
monthly payment have to be MORE than that? (Note: This will give you a lower estimate
for the monthly payment, a good place to start with when you figure out the exact
monthly payment needed to pay off the loan in the allowed time.)
(6) Try (guess and check) to find the monthly payment so that:
(a) the loan will be paid off after 24 months.
(b) the last payment is as close to, but not more than the regular monthly payments you
have been making. (For example, if you have been making monthly payments of $45,
you want your last payment to be as close to $45 as you can get it, but not more than $45!
When you found the best possible monthly payment that satisfies (a) and (b) in (6) above,
save the file and submit it to Canvas. Save the file with the following name:
FirstnameLastname-TV-Loan.xlsx
(e.g.: BerndRossa-TV-Loan.xlsx )
( or
JoeSmith-TV-Loan.xlsx )
You must submit your solution before midnight on Tuesday September 6, 2016.
This will be graded! Submit your Excel file for the last exercise (the 24 month loan of
$1,000 with payments) via Canvas. (I posted an assignment on Canvas that requires a
submission. I hope you know/can figure out how this works. You must submit an xlsx-file!
(When you save your file, use the “Save As” option, and choose the format which will produce
that extension!)