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					                Simple and Compound Interest
                     Car loan problems

         You were hoping that your trusty Yugo would be your transportation through college.
         Unfortunately, it had a serious breakdown, and thanks to NATO, spare parts are not
         available. You have found a great AMC Gremlin for $1400. A friend has offered to loan
         you the money at 9% interest per year, charging simple interest. You will pay back
         the entire loan in 4 years after you graduate and get a good paying job.
         How much will you pay back to your friend?

Step 1   Help        Enter the amount borrowed in cell D19.
         Help        Enter the interest rate in cell D21.
                     Press Ctrl-a when finished.
Help                 Move mouse over any cell with a red arrow.



         Amount borrowed:

         Interest rate:
                Simple and Compound Interest
                     Car loan problems

         You were hoping that your trusty Yugo would be your transportation through college.
         Unfortunately, it had a serious breakdown, and thanks to NATO, spare parts are not
         available. You have found a great AMC Gremlin for $1400. A friend has offered to loan
         you the money at 9% interest per year, charging simple interest. You will pay back
         the entire loan in 4 years after you graduate and get a good paying job.
         How much will you pay back to your friend?

Step 2   Help        Enter the balance for year 0 in cell H19.
         Help        Enter the formula for interest in year 1 in cell G20.
         Help        Enter the formula for balance in year 1 in cell H20.
                     Press Ctrl-b when finished.


                                                        Year       Interest  Balance
         Amount borrowed:         $1,400                       0          $0
                                                               1
         Interest rate:            9.00%                       2
                                                               3
                                                               4
                Simple and Compound Interest
                     Car loan problems

         You were hoping that your trusty Yugo would be your transportation through college.
         Unfortunately, it had a serious breakdown, and thanks to NATO, spare parts are not
         available. You have found a great AMC Gremlin for $1400. A friend has offered to loan
         you the money at 9% interest per year, charging simple interest. You will pay back
         the entire loan in 4 years after you graduate and get a good paying job.
         How much will you pay back to your friend?

Step 3   Help        Copy the formula for interest for each year down column G.
         Help        Copy the formula for balance each year down column H.
         Help        Put the final amount to pay back in cell H26.
                     Press Ctrl-c to see the final solution.


                                                        Year      Interest  Balance
         Amount borrowed:         $1,400                       0         $0   $1,400
                                                               1 $     126    $1,526
         Interest rate:            9.00%                       2
                                                               3
                                                               4


                                                     Amount repaid:
                Simple and Compound Interest
                     Car loan problems

         You were hoping that your trusty Yugo would be your transportation through college.
         Unfortunately, it had a serious breakdown, and thanks to NATO, spare parts are not
         available. You have found a great AMC Gremlin for $1400. A friend has offered to loan
         you the money at 9% interest per year, charging simple interest. You will pay back
         the entire loan in 4 years after you graduate and get a good paying job.
         How much will you pay back to your friend?

Final solution
          Press Ctrl-d to generate another problem.




                                                        Year        Interest  Balance
         Amount borrowed:         $1,400                       0           $0   $1,400
                                                               1   $     126    $1,526
         Interest rate:            9.00%                       2   $     126    $1,652
                                                               3   $     126    $1,778
                                                               4   $     126    $1,904


                                                     Amount repaid:            $1,904 = H23



         8 Copyright, 2001, Thomas A. Lacksonen

				
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