Please type your question here: You take out a short-term loan from a bank for t
ID: 1190087 • Letter: P
Question
Please type your question here: You take out a short-term loan from a bank for the amount of $20,000 at interest rate of 5% per year nominal. The loan period is 1 year.
A) What is the payment period
B) What is the loan payment??
C) What is the interest paid??
D) What is the principle paid??
E) What is the remaining balance??
F) What is the interest you paid
Note: I am trying to solve these problems using Micrcosoft Excot. Please per each question, she specifically the formula used to solve earch portion....example : PMT (i, n, -P) , IPMT (i, x, n, -P), PPMT (i, x, n, -P) , and NPER (i, -A, P).
Explanation / Answer
A loan worth $20,000 is taken. It is to be repaid after 1 year. The interest rate is 0.05.
A) The payment period is given. It is one year.
B) The payment to be made after one year is $21,000 [=$20,000(1+0.05)]. To calculate this figure in excel, click on any cell and type: =PMT(0.05,1,-20000,0). Now click 'enter.' (Do not forget to place minus before 20000).
C) The interest paid is $1,000. To calculate this figure using excel, click on any cell and type: =PMT(0.05,1,-20000)-20000. Now click 'enter.'
D) The principle paid is the amount borrowed at the beginning of the loan period. It is $20,000.
E) Since the loan is fully paid off, there is no remaining balance.
F) The interest paid is $1,000. To calculate this figure using excel, click on any cell and type: =PMT(0.05,1,-20000)-20000. Now click 'enter.'