Excel Companion Chapter 3 section 8
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CAR LOAN AMORTIZATION TVM2.xls

Open the sheet CAR LOAN 1 in TVM2.xls.

SITUATION: A 9% car loan for $30,000 is to be repaid over 3 years by making equal payments at the end of each month. We would like an amortization schedule for the loan showing the portion of each payment applied as interest, the portion applied to reduce the principal, and the unpaid balance at the end of each month. The sheet below shows the first 24 payments.

TVM2.xls- CAR LOAN 1

 

QUESTIONS:

1. Is the $30,000 a future value or a present value?
2. Why is the interest due in the first month equal to $225.00?
3. Why is the interest due in each successive months less than the previous month?
4. Why does the height of all of the stacked bars (red and green) remain constant?

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Copyright © Joseph F. Aieta, Babson College 1997