CGS 2518 CH #6 CONCEPTS EXAM
QUESTIONS AND ANSWERS
Assume that you are buying a car for $25,500 with a $4,000 down payment, and you
are borrowing the rest from a bank at 5.5% annual interest compounded monthly. Your
monthly payments are $400. Write an Excel formula to determine the number of years it
will take you to pay off this loan. - Answer-=NPER(.055/12,-400,25500,0)/12
Consider a $150,000 mortgage at 5% annual interest compounded monthly, to be paid
back over the next 30 years. The loan will have a $5,000 balloon payment due at the
end of the loan. Write an Excel formula to determine the payment that must be made
each month on this loan. - Answer-=PPMT(.05/12,30*12,150000,-5000)
Assume that you are investing $3,000 in a savings plan today and will make additional
contributions of $300 per quarter. The plan says 3% interest per year compounded
quarterly at the beginning of each period. Write an Excel formula to determine how
much your savings will be worth in 5 years. - Answer-=FV(.03/4,5*4,300,-3000)
Write an Excel formula to determine the amount of money that can be depreciated each
year, using straight line depreciation, for a new packaging machine purchased by your
company. The machine originally cost $150,000 and has a useful life of 5 years and an
estimated salvage value of $5,000. - Answer-=SLN(150000,5000,5)
Function to calculate the value at the end of a financial transaction - Answer-FV
Function to Calculate the interest percentage per period of a financial transaction -
Answer-Rate
Function to calculate the value at the beginning of a financial transaction - Answer-PV
Function to calculate the number of compounding periods in a financial transaction -
Answer-NPER
Function to calculate periodic payments into or out of a financial transaction - Answer-
PMT
Use a 0 for this argument to indicate that interest will be paid at then end of each
compounding period - Answer-Type
This type of interest is calculated based on principal and pervious interest earned -
Answer-Compound interest
QUESTIONS AND ANSWERS
Assume that you are buying a car for $25,500 with a $4,000 down payment, and you
are borrowing the rest from a bank at 5.5% annual interest compounded monthly. Your
monthly payments are $400. Write an Excel formula to determine the number of years it
will take you to pay off this loan. - Answer-=NPER(.055/12,-400,25500,0)/12
Consider a $150,000 mortgage at 5% annual interest compounded monthly, to be paid
back over the next 30 years. The loan will have a $5,000 balloon payment due at the
end of the loan. Write an Excel formula to determine the payment that must be made
each month on this loan. - Answer-=PPMT(.05/12,30*12,150000,-5000)
Assume that you are investing $3,000 in a savings plan today and will make additional
contributions of $300 per quarter. The plan says 3% interest per year compounded
quarterly at the beginning of each period. Write an Excel formula to determine how
much your savings will be worth in 5 years. - Answer-=FV(.03/4,5*4,300,-3000)
Write an Excel formula to determine the amount of money that can be depreciated each
year, using straight line depreciation, for a new packaging machine purchased by your
company. The machine originally cost $150,000 and has a useful life of 5 years and an
estimated salvage value of $5,000. - Answer-=SLN(150000,5000,5)
Function to calculate the value at the end of a financial transaction - Answer-FV
Function to Calculate the interest percentage per period of a financial transaction -
Answer-Rate
Function to calculate the value at the beginning of a financial transaction - Answer-PV
Function to calculate the number of compounding periods in a financial transaction -
Answer-NPER
Function to calculate periodic payments into or out of a financial transaction - Answer-
PMT
Use a 0 for this argument to indicate that interest will be paid at then end of each
compounding period - Answer-Type
This type of interest is calculated based on principal and pervious interest earned -
Answer-Compound interest
