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Save this excel as: last name_pay Calculating a Payment Using the Payment Formula The Payment Formula is: PMT(rate,nper,pv,fv,type) Rate: Must be expressed as a % for 12 monthes Nper Total number of payments in months Pv What the current value of the item is right now Fv How much you owe after making all of the payments Type Always either a 1 or a 0. You should use a 1. 1. Example You are buying a computer that costs $1,000 and financing it for 3 years at 6%. In the formula bar you will type the following: PMT(.06/12,36,1000,0,1) The 1 means your payment is due on the 1st of the month 6% divided by How much you owe after your 12 last payment. Duh! How much the 3 years of computer costs today payments in months Type the formula in the yellow box and see what the payment will be >>>> 3. Practice Makes Perfect Calculate the following payments. Put the formulas in the yellow cells. Finance a car that costs $20,000 at 6% for 3 years. Finance a car that costs $20,000 at 12% for 3 years. Finance a car that costs $20,000 at 0% for 3 years. Finance a house that costs $200,000 at 7% for 30 years. 2. You do it: You are considering the same computer that cost $1,000. But now you are considering financing it for 4 years at 15%. What would your payment be? Enter the PMT formula here >> Now calculate the payment for the same computer ($1,000) for 4 years at 6%. What are the payments? Put the PMT formula here>>>> Which payment is higher? The one at 15% or the one at 6%? Put your answer on the yellow line below. Why is one payment higher than the other? They are both for the same amount of money ($1,000). Answer below. Use the list below to find a car you really like. Find much it costs. When you know how much is costs, total cost in cell B17. Then complete the assignme Car Name Create a hyperlink on the name of the car that goes to the webpage with the cost Ford Cadillac PMT(rate,nper,pv,fv,typ Lincoln Toyota CAR Mercury Nissan For a more complete description o COST Chevrolet Hyundai function. >>>>>>> Buick Jaguar Rate is the interest rate for the lo Chrysler BMW Dodge Lexus Nper is the total number of paym Jeep Honda General Land Pv is the present value, or the to Motors Rover payments is worth now; also know Aston Volvo Martin Fv is the future value, or a cash Rolls- payment is made. If fv is omitted, i Saab Royce future value of a loan is 0. Porsche Subaru Type is the number 0 (zero) or 1 Volkswag en Acura Set type equal to If payments are 0 or omitted At the end of the perio Mitsubishi Saturn 1 At the beginning of the period Infinity Hummer Remarks If you make monthly payments on Car Cost Interest Months to Payment rate of 12 percent, use 12%/12 for Rate Pay Off Example 1 6% 36 6% 60 Data Description 6% 96 8% Annual interest rate 10 Number of months of payments 10000 Amount of loan 10% 36 Formula Description (Result) 20% 36 =PMT(A2/12, A3, A4) Monthly pay 24% 36 1,037.03) =PMT(A2/12, A3, A4, 0, 1) Monthl terms, except payments are due a Note The interest rate is divided number of years the money is p number of payments. number of payments. Paste a picture of the car you want to buy below this sentence. really like. Find out how much is costs, put the e the assignment. PMT(rate,nper,pv,fv,type) or a more complete description of the arguments in PMT, see the PV Rate is the interest rate for the loan. Nper is the total number of payments for the loan. Pv is the present value, or the total amount that a series of future ayments is worth now; also known as the principal. v is the future value, or a cash balance you want to attain after the last ayment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the uture value of a loan is 0. ype is the number 0 (zero) or 1 and indicates when payments are due. Set type equal to If payments are due or omitted At the end of the period At the beginning of the period f you make monthly payments on a four-year loan at an annual interest ate of 12 percent, use 12%/12 for rate and 4*12 for nper. Data Description % Annual interest rate 0 Number of months of payments 0000 Amount of loan ormula Description (Result) PMT(A2/12, A3, A4) Monthly payment for a loan with the above terms (- PMT(A2/12, A3, A4, 0, 1) Monthly payment for a loan with the above erms, except payments are due at the beginning of the period (-1,030.16) Note The interest rate is divided by 12 to get a monthly rate. The umber of years the money is paid out is multiplied by 12 to get the umber of payments. umber of payments. Use the Internet to find companies that make new homes an area that you would like to live. Look at their websites to find a hom limit - cost is no problem. When you have found the house you like, fill in the chart below, in the yellow cells. How much did you really pay for Maker Model Cost Payment for the house after 30 years? 30 years at 6% (monthly pmt X 12 X 30) Now, calculate the loan cost using slightly different data. How much did you really pay for the house after 15 years? Maker Model Cost Payment for (monthly pmt X 12 X 15) 15 years at 6% The total cost after 30 years was (F9): The total cost after 15 years was (F16): =PMT(rate,nper,pv,fv,type) For a more complete description of the arguments in PMT, see the PV function. Rate is the interest rate for the loan. Nper is the total number of payments for the loan. Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal. Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted is assumed to be 0 (zero), that is, the future value of a loan is 0. k at their websites to find a home you would like to own. The sky is the eally pay for How much interest do you pay? (30 yr) (total cost with interest minus house cost) How much interest do you pay? (15 yr) (total cost with interest minus hose cost) s is worth now; also known as yment is made. If fv is omitted, it Tom graduated from college last year and found a new job. The job pays $2,500.00 per month. Tom's budget shows below. See if you can figure out if Tom makes enough money to pay his bills. Tom's Monthly Income $2,500.00 Expences Jan Feb Mar Apr May Rent $600.00 $600.00 $600.00 $600.00 $600.00 Electric $30.00 $55.00 $65.00 $85.00 $100.00 Water $22.00 $22.00 $22.00 $22.00 $22.00 Car payment $500.00 $500.00 $500.00 $500.00 $500.00 Insurance for car $125.00 $125.00 $125.00 $125.00 $125.00 Apartment Insurance $20.00 $20.00 $20.00 $20.00 $20.00 Taxes on salary $825.00 $825.00 $825.00 $825.00 $825.00 Clothing $50.00 $50.00 $50.00 $75.00 $75.00 Entertainment $100.00 $100.00 $100.00 $100.00 $100.00 Credit Card payments $110.00 $110.00 $110.00 $110.00 $110.00 Food $150.00 $150.00 $150.00 $150.00 $150.00 Total Expences Average Monthly Expense: Tom's Income for the entire year? Tom's expences for the entire year? Balance? (income minus expences) om's budget shows below. June July Aug Sept Oct Nov Dec. Totals $600.00 $600.00 $600.00 $600.00 $600.00 $600.00 $600.00 $115.00 $115.00 $120.00 $115.00 $85.00 $55.00 $50.00 $22.00 $22.00 $22.00 $22.00 $22.00 $22.00 $22.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $825.00 $825.00 $825.00 $825.00 $825.00 $825.00 $825.00 $75.00 $75.00 $25.00 $25.00 $100.00 $100.00 $50.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $110.00 $110.00 $110.00 $110.00 $110.00 $110.00 $110.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00

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posted: | 8/25/2012 |

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