# Microsoft Office/Loan Payment Amortization Schedule

## Objectives

The Student Will Be Able To (TSWBAT):

• Format sections of a worksheet for easy readability
• Create Global references and use them in a formula
• Determine the monthly payment of a loan with the PMT function
• Determine the present value of a loan using the PV function
• Analyze data in a worksheet
• Create an Amortization schedule
• Create hyperlinks in a worksheet
• Set a print area and print part of a worksheet

## Vocabulary

Hyperlink - links from one document to another, web page to another, or part of a document to another part of the same document

Global Cell Name - A name given to one cell in a workbook, that can be used in any sheet

PMT Function - determines the monthly payment on a loan based on the rate, payment amount and loan amount.
-PMT(Monthly_interest_rate/12, 12*years, loan_amount)

Data Table - a range of cells that shows the answers to a formula

• one-input data table - one value in the formula varies
• two-input data table - two values in the formula vary
• Input Values - The values that are put into the formula for a data table

Amortization Schedule - A table of values that shows the beginning balance of a loan, ending balance for a loan, amount paid toward the principle, and amount paid toward the interest at the end of each year.

PV Function - determines the present value of a loan, or how much you still need to pay at the end of a given amount of time

Annuity - a series of fixed payments such as your monthly payments on a loan

## Lesson

### Payment Calculator

#### Titles

• Titles
• Type "Payment Calculator" in cell B1
• Merge and Center cells B1:E1
• Format the font as you like - size 16pt
• Type "Date" in cell B2
• Type "Item in cell B3
• Type "Price in cell B4
• Type "Down Payment" in cell B5
• Type "Loan Amount" in cell B6
• Type "Rate" in Cell D2
• Type "Years" in cell D3
• Type "Monthly Payment" in cell D4
• Type "Total Interest" in cell D5
• Type "Total Cost" in cell D6
• Formatting
• Make each column as wide as it needs to be for the labels
• Bold all label text
• Change the sheet name to "Car Loan"
• Save the spreadsheet to your storage space calling it "Loan Calculator"

In cell C2 type:
=now()

#### Formatting

• an outside border
• column dividers
• a fill color
• Go to the home tab
• go to the font group
• click on the borders drop down button
• choose more borders
• make sure all colors go together and you can read the text

Format the data as the proper type

• Dollars
• Price
• Down payment
• Loan amount
• Monthly payment
• Total interest
• Total cost
• Percent
• Rate
• General number
• Years
• Date
• Date

#### Enter Loan Data

Find a Car you want to purchase and the price

• go to Kelley Blue Book
• Find a NEW car you want to buy
• Find the price
• go to BankRate.com
• Find the interest rate for a car loan
• Remember the number of years for that interest rate
• Determine if you have any money to put as a down payment NOW
• C3 = name of car you are purchasing
• C4 = Price for the car
• C5 = down payment if you have one, 0 if you don't
• E2 = interest rate for the car loan
• E3 = number of years for the loan

#### Create cell Global Names

• Click on the cell you wish to name - C4
• Go to the Formulas tab
• Go to the Define Names group
• Click on Define Name
• Make sure the name is what you want and click OK
• C4 = Price
• C5 = Down_Payment
• C6 = Loan_Amount

etc...

#### Compute loan amount

The amount of a loan you need to take out is the price of the car minus the amount you will pay when you purchase the car or the down payment.

• go to cell C6
• = price - down_payment

or

• = C4 - C5

#### Determine the monthly payment

The monthly payment is how much you will pay each month to pay off the price of the car. This is computed with the interest rate of the loan, the years you will take to pay off the loan, and the total loan amount.

• go to cell E4
• -pmt(rate/12, 12*years, loan_amount

or

• -pmt(E2/12, 12*E3, C6

#### Determine the total interest

The total interest is the total amount the bank is going to make on loaning you the money to purchase your car. For this computation you will need to know how much the loan amount was, and how much you paid in total over the years. That is figured by taking the years times 12 to find the months, and then multiplying by the monthly payment.

• go to cell E5
• =12*years*monthly_payment-loan_amount

or

• =12*E3*E4-C6

#### Determine the total Cost

The total cost of the car is how much you paid including the down payment and interest. This is figured by adding the price of the car with the total interest.

• go to cell E6
• =price+total_interest

or

• =C4+E5

• Go back to kelly blue book
• find the price of the same car that is one year old
• Go back to BankRate.com
• find the interest rate for a used car
• Analyze the difference in how much total you pay for the used car versus a new car

### Interest Rate Schedule

#### Titles

• B7 = Interest Rate Schedule
• format to same fonts as B1
• center across B7:E7
• B8 = Rate
• C8 = Monthly Payment
• D8 = Total Interest
• E8 = Total Cost

make all titles bold

#### Create a series with the fill handle

• B10 = 4.00%
• B11 = 4.25%
• select cells B10:B11
• use the fill handle to drag down until you reach 8.00%

• C9 = E4
• D9 = E5
• E9 = E6

#### Define the Data Table

• select B9:E26
• go to the Data tab
• go to the Data Tools group
• click on the what-if analysis drop down
• choose Data Table
• click in the column Input Cell
• click on the rate from cell E2
• click on OK

#### Format

• select cells B8:E26
• shade and border similar to the section above but a different color

#### Conditional Formatting

• select B10:B26
• go to the HOME tab
• go to the styles group
• click on the conditional formatting drop down
• click on Highlight cell rules - equal to
• click in the format cells that are EQUAL TO
• click on E2
• click on OK

Change the rate in cell E2 and watch the color section change.
Notice the color rate changes, but the values in the data table does not. You would have to re-select the cells and re do the data table steps.

### Amortization Schedule

#### Titles

• G1 = Amortization Schedules
• center across G2:K2
• same font style and color as the other two sections
• G2 = year
• H2 = Beginning Balance
• I2 = Ending Balance
• J2 = Paid on Principle
• K2 = Interest Paid
• Wrap text for H2:K2

#### Year Series

• G3 = 1
• use the fill handle to fill down to G26
• click on the smart button - auto fill options
• click on fill series

• H3 =C6

#### Ending Balance Formula

• I3 =PV(\$E\$2/12, 12*(\$E\$3-G3), -\$E\$4)
• I4 =IF(H4<=0,0,PV(\$E\$2/12, 12*(\$E\$3-G4), -\$E\$4))

• J3 =H3-I3
• J4 =H4-I4

#### Interest Paid Formula

• K3 =12*\$E\$4-J3
• K4 =IF(H4<=0, 0, 12*\$E\$4-J4)

• Select I4:K4
• fill down

• H4 = I3
• fill down

#### Amortization totals

• I28 = Subtotal
• I29 = Down Payment
• I30 = Total Cost
• J28 = auto sum column J
• K28 = auto sum column K
• K29 = C5
• K30 = J28 + K28 + K29

#### Formatting

format the same as the other sections just a different color

#### Place a Graphic

• go to cell H25
• Find a picture in clip art or the internet that represents your car
• Go to the insert tab
• go to picture or clip art depending on what you are using

#### Create a Graphic as a link

• Right Click on the picture and go to Hyperlink
• In the address place the URL for the web site - http://www.kbb.com
• Find the web page for the car you are purchaseing

### Set a print area

• Select the area you want to print - click and drag
• Go to the Page Layout Tab
• Go to the Page Set up group
• Click on the drop down for Print Area
• Click on Set Print Area
• Print Preview and you will see only that area will print

You can clear the print area or change the print area from this same drop down.