Page 114 - CalcBus_Flipbook

11-20 Credit with MS Excel CH 11]

28. Your computer will populate all of the cells as illustrated. Compare and contrast your
screen with the illustration. If it does not look like this then go back and correct your
entries. The errors are probably in Row 24.

This illustrates one years payments on a $25,000 fully amortized loan with an interest
rate of 5% for a loan life of 30 years making 12 payments a year which is monthly. The
information it provides is the regular monthly payment, the amount of each payment that
goes to Interest (first) and Principal (second), the balance and the accumulation of the
Interest Payment over time. Of course the information above the Loan Payment Schedule
tells you that there will be a total of 360 payment for the life of the loan; that the Total Cost
of the loan will amount to $48,313.95 and the Total Interest to be paid will amount to
$23,313.95.

29. To extend the information in this table repeat the copy sequence as explained in #23 to
#25. You will begin by highlighting with your mouse at cell B34 across to cell J34 and
then dragging down to a row that you prefer.

LAST INSTRUCTION: SAVE THE FILE!

What you have built is a program that will calculate the payments for an amortized
loan. You may use it on any business transaction involving a loan where you make regular,
level, payments. It is a very versatile program that allows you to look at various loan
amounts, interest rates, life’s for a loan and even change the numbers of payments per year
and determine the total number of payments for a loan. This program can be used when
you purchase an automobile, truck, tractor, equipment, real estate, land or a business in
any transaction where you take a loan and make regular payments.
From a business standpoint, think about the negotiations for the purchase price, loan
amounts, interest rates and life of a loan and then manipulate each as an increase or
decrease for any one or all. You use this to compare and determine which financial
arrangements best fit your budgets. This program can be used for your personal purchases
or purchases by a business and know that every smartly run business goes through the
process of determining what payment structure is best for their budgets just as the
individual should.
THE PRINCIPALS OF BUSINESS ARE EXACTLY THE SAME FOR THE INDIVIDUAL
AS THEY ARE FOR THE FORD MOTOR COMPANY. THE DIFFERENCE IS THE SIZE
YOUR CHECKBOOKS. -R.D. SKIDMORE

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