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1. In cell E5, write an Excel formula which can be copied down the column into cells E6:E8 to show the actual loan amount rounded to nearest dollar. The loan amount is what you need to borrow from the bank after you have paid the specified down payment =ROUND(B5-B5*D5,0)

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2. The Ford Taurus promotion is as follows: $22,300 sticker price with 4.8% financing for 5 years. A down payment of 5% is required. Write an Excel formula in cell H5 to determine the monthly payment on this loan. =PMT(C5/G5,F5*G5,E5,I5)

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3. You always wanted to own a Thunderbird. There are no special promotions at the current time. The dealer has told you that the sticker price is $24,300 and a 20% down payment is required for the standard Ford loan with 6.8% annual interest. The loan requires you to pay $259 per month. Write an Excel formula in cell F6 to determine how many years it will take to pay off this loan. =NPER(C6/G6,H6,E6,I6)/G6

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4. The Ford Focus seems like the most reasonably priced car on the lot. The car sells for $15,799. A special promotional financing is available where you pay 10% up front and only $225 per month (at the end of each month). The annual interest rate is 3.5% interest compounded monthly. The loan duration is 5 years at the end of which you will owe a balloon payment for the remaining amount. Write an Excel formula in cell I7 to determine the value of the Balloon payment. =FV(C7/G7,F7*G7,H7,E7)

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5. How would you modify the formula in question 4 if the payments are made at the beginning of each month? =FV(C7/G7,F7*G7,H7,E7,1) Add the last argument of the financial function and make it 1

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6. You also decide to consider the Windstar. At $17,999, it only has a 5% down payment and can be financed for only 3 years with a payment of $1730/quarter. The loan is compounded quarterly. Write an Excel formula in cell C8 to calculate the annual percentage rate of this loan. =G8*RATE(F8*G8,H8,E8,I8)

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7. The salesman has told you that for only $320 a month and no money down you can own a Mustang. The loan has an annual interest rate of 6.2% compounded monthly and is payable over the next 54 months. The salesman, however, failed to mention the actual selling price of the vehicle. Write an Excel formula in cell E9 to calculate the selling price (which is also the loan amount since the down payment is $0) of this vehicle. =PV(C9/G9,F9*G9,H9,I9)

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8. You have $2500 put away that can be used towards a down payment, as given in the cell D1 (which you’ve named down). You can also afford up to $350 per month, as indicated in cell D2 (which you’ve named maxpay). Write an Excel formula in cell E11 to determine (True/False) if you can purchase the Ford Taurus (i.e. you can afford the down payment and the monthly payment). Use the named ranges in your formula. Note that the numbers given in cells D1 and D2 are positive. =AND(B5*D5<=down,-H5<=maxpay)

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9. Your great uncle Zeus has died unexpectedly and left you a bank CD in his will. The CD was purchased 10 years ago for $12,000 and pays 6% per year compounded annually. Write a formula in cell J5, which can be copied down to the cells J6:J8, to determine (True/False) if you have enough money to purchase this car without any financing. =FV(0.06,10,0,-12000)>=B5

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10. Write a formula in cell K5, which can be copied down the column, to determine if you will consider the car. You will consider a car if the loan amount is less than $15,000 or the annual interest rate is less than 6.5%. The value in the cell should be either CONSIDER or REJECT. = IF (OR (E5<15000, C5<6.5%), “CONSIDER”, “REJECT”)) OR =IF(E5<15000,"CONSIDER",IF(C5<6.5%,"CONSIDER","REJECT"))

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Quick answers If the bank is offering 12% per year compounded quarterly what would be the value of “i” in the Amount of an annuity formula? If the Nicole.

Quick answers If the bank is offering 12% per year compounded quarterly what would be the value of “i” in the Amount of an annuity formula? If the Nicole.

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