Chapter
SI
Worksheet
All values in Column
3
are the same to show the fixed payment that
is paid every month on the loan.
1.
Move the entry marker to Cell
8,3,
press
0;
then select
2. Press
0,
and type
#RlC2*#R2CZ/ (1- 1/(1+ #R2C2) !#R3C2)
(ENTER].
The number sign
(#)
preceding a cell number indicates
to
always
use the value in that particular cell. In other words,
the original formula entered does
not
change for each row.
ROWS 8-19.
Note:
This formula written in normal fashion is:
Fixed payment
=
(Loan Amt. x Int. Rate)
/
(1
-
1/(1
+
Int. Rate)”) where Loan Amt.
=
original amount of en-
tire loan, Int. Rate
=
interest rate per period, and n
=
number of periods.
This complicated-looking formula defines the numerator as the value
in Cell 1,2
(LOAN AMT)
multiplied
(*)
by the value in Cell 2,2 (the
interest rate). The denominator is
1
minus
1
over
1
plus the value
in Cell 2,2
(I
N
T RAT
E)
raised to the value in Cell 3,2. The number
of
P
E
R
IO
D
S
becomes an exponential power indicated by
!
.)
Column
4
shows the interest portion of each payment, which is the
balance for a period multiplied by the interest rate.
1.
Move the entry marker to Cell
8,4,
press
0;
then select
2. Press
0,
and type
#R2C2
*
C2
(ENTER).
For a particular
period, this formula takes the value in the same row in Column
2 (a period’s balance) and multiplies it by the interest rate you
enter in Cell 2,2.
The principal payment of each period, the part of the total payment
which actually goes to paying off the balance of the loan, is displayed
in Column
5.
1.
Move the entry marker to Cell
8,5,
press
0;
then select
2. Press
0,
and type
C3
-
C4
(ENTER).
This formula takes the
total payment value in Column
3
and subtracts the correspond-
ing interest payment in Column
4
to come up with that period’s
principal payment.
ROWS 8-19.
ROWS 8-19.
Tandy
1000
59
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