Financial Functions

Overview  Power of Excel = Calculations –Loan Calculations –Expense Calculations –Consolidate Values –Search for Values

Loan Calculations  Open Excel & rename Sheet 1- Loan  In cell A1- Date; A2- Principal; A3- Interest; A4- Years; A5- Payment  In Cells B1- 6/1/2006; B2- $20,000; B3- 5.5%; B4- 5

Insert Formula Function  Click in cell B5 (Payment) and click fx next to formula bar, search for- calculate loan payment, PMT, click OK  In the Function Arguments Box, type –Rate- B3(5.5%)/12 –Nper- B4(5)*12 –PV- B2(20,000) –Click OK  Amount is red- it’s a payment (negative)  Change #’s to see payment change

Name Cell Ranges  Look in formula bar to see formula for cell  Select the entire range of cells A1:B5  You can name a range of cells by selecting the range and going to Insert, Name, Create  Uncheck top row if you don’t have headings there  Name box reflects name change  Formulas are easier to read with names

Amortization Table  Drag the sheet you were just working with over while holding the Ctrl key down to copy it  Rename it Amortization  Make D1 =B1, click and drag to fill months  In cell E1, Type =B2

Calculate Future Value  While in cell E2, click the fx button, type future value of a loan- FV, click OK –Rate- B3(Interest Rate)/12 –Nper- 1 –Pmt- B5 (Payment) –PV- E1 (Principal)  It is red for negative, type a – between = and FV (makes it positive)  Click & Drag formula down, use format painter  To add more months, select last two rows and drag down

Dynamic Dates  Select cell D2- click fx, Date –Year- YEAR(D1) –Month- MONTH(D1) +1 –Day- DAY(D1) OR 1 (first of the month)  Drag D2 down to the end of the table  Now dates will change automatically in Amortization Table when you change the date in the Payment Calculator