# Solved exp19_excel_ch07_ml2_finances | Computer Science homework help

Your family is considering purchasing a house and investing in a business venture. You started the structure for a loan amortization table and the investment table. You will complete the first five years of the 20-year loan amortization table. To complete the table, you will enter formulas to calculate the beginning balance, monthly payment, and ending balance. You will use financial functions to calculate the interest and principal paid for each monthly payment. In addition, you want to calculate cumulative interest after the first year, total interest over the life of the loan, and the amount of principal paid after the first year. You also want to see how many months half or more of the payment is for interest. You will then focus your attention on completing an investment table using date functions, formulas, and a financial function to calculate the future value of the investment.

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The first step is to enter a   formula to reference the loan amount for the beginning balance for the first   payment.

In cell B9, enter a formula that references cell D2.

3

A loan amortization table   usually contains a column that displays the monthly payment for each row.

In cell C9, enter a formula to reference the monthly payment in cell D3. Use   a mixed reference and copy the formula to the range C10:C68.

4

The monthly payment indicates   the total amount of the payment, which includes principal and interest.   Interest is calculated based on the loan amount, the rate, the payment   number, and the number of payments.

In cell D9, enter the IPMT function to calculate the interest paid for the   first month using mixed cell references to the input area for the Rate, Nper,   and PV arguments and using cell A9 for the Per argument. Make sure the result   is a positive value and copy the function to the range D10:D68.

5

After calculating the interest   paid, the rest of the monthly payment repays the principal.

In cell E9, enter the PPMT function to calculate the principal paid for the   first month using mixed cell references to the input rea for the Rage, Nper,   and PV argument and using cell A9 for the Per argument. Make sure the result   is a positive value and copy the function to the range E10:E68.

6

The last column of the loan   amortization table calculates the ending balance.

In cell F9, calculate the ending balance by subtracting the Principal   Repayment from the Beginning Balance in row 9. Copy the formula to the range   F10:F68.

7

The beginning balance for each   payment is calculated and entered in column B.

In cell B10, enter a formula that references the first month’s ending balance   in cell F9. Copy the formula to the range B11:B68.

8

Ensure that Accounting Number   Format is applied to the range B9:F68.

9

You want to calculate the total   interest paid for the first year.

In cell F2, insert the CUMIPMT function to calculate the cumulative interest   paid for the first year. Use A9 for the Start_period argument and B6 for the   End_period argument. Use 0 as the Type argument. Make sure the result is a positive value.

10

Now you want to calculate the   total interest paid for the entire loan.

In cell F3, insert the CUMIPMT function to calculate the total cumulative   interest paid for the entire loan. Use A9 for the Start_period and D6 for the   End_period arguments. Make sure the result is a positive value.

11

You want to calculate the   cumulative principal paid for the first year.

In cell F4, insert the CUMPRINC function to calculate the cumulative   principal paid for the first year. Use A9 for the Start_period and B6 for the   End_period arguments. Make sure the result is a positive value.

12

In cell F5, insert the COUNTIF   function to count the number of payment periods in which the interest in the   loan amortization table is higher than one-half of the monthly payment (cell   D4).

13

Apply General number format to   cell F5.

14

You want to extract the year and   use it to determine the payoff year.

Display the Investment sheet. In cell D4, insert the YEAR function to extract   the year from cell D3 and add the number of years (cell B3). You will change   the format of the result in the next step.

15

You need to format the result in   cell D4 as a number.

Ensure that General number format is applied to cell D4.

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At the end of each period, you   will add \$125 to the investment.

In cell D7, enter a formula that references cell D2. Use a mixed reference to   ensure the row number does not change. Copy the formula to the range D8:D54.

17

You want to calculate the   interest earned per period.

In cell C7, multiply the beginning balance in cell B7 to the result of   dividing the APR by the No. of Pmts per Year. Use mixed and relative cell   references. Copy the formula to the range C8:C54.

18

You are ready to calculate the   ending balance for each payment period.

In cell E7, add the Beginning Balance, Interest Earned, and End-of-Period   Investment for row 7. Copy the formula to the range E8:E54.

19

You will use a nested function   to calculate the dates in column A.

In cell A8, create a DATE function with a nested YEAR function, a nested   MONTH function and then add 1 to increment the month, and a nested DAY   function. The function arguments should reference the date on the previous   row.

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Copy the function from cell A8   to the range A9:A54 but preserve the fill formatting.

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In cell E56, insert the FV   function to calculate the future value of the investment use references to   the respective cells in the input area for the arguments. Make sure the   result is positive. Leave the Type argument empty.

22

Create a footer with your name   on the left side, the sheet name code in the center, and the file name code   on the right side of both sheets.

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Save and close Exp19_Excel_Ch07_ML2_Finances.xlsx.   Exit Excel. Submit the file as directed.

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