Financial Functions, Data Tables, and Amortization Schedules Chapter 4
What we will cover Controlling thickness and color of outlines and borders Naming cells Using the PMT function to calculate monthly payments Using the present value (PV) Creating data tables
What we will cover Adding a pointer to a data table Creating an amortization schedule Setting print area to print only sections of a worksheet Setting print options
What we will cover Using formula checking Hiding and unhiding cell gridlines Protecting and unprotecting cells
Financial Functions Excel has many different functions that are dedicated to just finance. Some are: Depreciation Methods declining balance depreciation, double declining balance depreciation, sum of the year s digits depreciation, straight line depreciation
Financial Functions, cont. present value future value internal rate of return payments and so on...
loan calculator Parts of the Worksheet calculate payments on a loan where you can vary the number of years and interest rate data table displays payments at a range of interest rates because the loan calculator will only show you payments at one interest rate at a time amortization table will show how much you would need to pay off your loan early after each year
Loan Calculator Amortization Table Data Table for Varying Interest Rates
Sample Loan Calculator A B C D 1 Loan Calculator 2 Date =now() Interest Rate 6.00% (given) 3 Item house (given) Years of Loan 30 (given) 4 Price 650000 (given) Monthly Payment calculated 5 Down Payment 65000 (given) Total Interest calculated 6 Loan Amount calculated Total Cost calculated Labels in column A used as names for the cells in column B Labels in column C used as names for the cells in column D
Which formula for total interest over the life of a loan is easier to read and understand? (12 * YEARS_OF_LOAN * MONTHLY PAYMENT - LOAN AMOUNT) OR (12*E2*E3-C5)
Cell Names If more than one word, you must use an underline between the words to trick Excel into thinking that they are really just one word: Loan_amount Total_interest Cell names are not case sensitive price = Price = PRICE = price
Easiest Ways to Name Cells Select cell or range of cells Type the name in the name box Press Enter Alternative Select cell or range of cells, Click Formulas Ribbon Tab Click Define Name Button Type the name Click OK
Naming Cells Using labels in left column to name the cells in the right column Select cells in a pair of adjacent columns A B C D 1 Loan Calculator 2 3 4 5 6 Date =now() Interest Rate 6.00% (given) Item house Years of Loan 25 (given) Price 650000 Monthly Payment calculated Down Payment 65000 Total Interest calculated Loan Amount calculated Total Cost calculated
Checking Your Cell Names ribbon name list name list button
Reason for Data Tables You can compare payments at different interest rates without having to put each rate in the loan calculator and then write down the payment. With a data table, you can see payments at several different interest rates at one time because they are all listed, one beneath the other. You can also see how much you would pay in total interest at each interest rate as well as how much the total cost of the house would be at each interest rate.
Review--Incrementing Numbers Creates a series of numbers (generally in a column) by telling Excel the starting number and the amount to increase the next number. Then use the fill handle to indicate the range, Type 2 in A1 and 4 in A2 to start the series and tell that Excel it should start with 2 and add 2 to each succeeding cell down the worksheet. Column B starts with 3 and adds 3 to each number down the worksheet. A B 1 2 3 2 4 6 3 6 9 4 8 12
A B C D Input Cell 1 Loan Calculator 2 Date xxx Interest Rate 5.75% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,748.00 5 Down Payment $30,000.00 Total Interest $142,740.46 6 Loan Amount 235,000.00 Total Cost $407,740.46 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 =D4 =D5 =D6 10 4.50% 11 4.75% 12 5.00% 13 5.25% 14 5.50% 15 5.75% See next slide
Input Cell A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.75% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,748.00 5 Down Payment $30,000.00 Total Interest $142,740.46 6 Loan Amount 235,000.00 Total Cost $407,740.46 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% 11 4.75% 12 5.00% 13 5.25% 14 5.50% 15 5.75%
Input Cell A B C D 1 Loan Calculator 2 Date xxx Interest Rate 4.50% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,589.36 5 Down Payment $30,000.00 Total Interest $108,302.37 6 Loan Amount 235,000.00 Total Cost $407,740.46 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $407,740.46 11 4.75% 12 5.00% 13 5.25% 14 5.50% 15 5.75%
Input Cell A B C D 1 Loan Calculator 2 Date xxx Interest Rate 4.75% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,620.58 5 Down Payment $30,000.00 Total Interest $115,044.51 6 Loan Amount 235,000.00 Total Cost $380,04451 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% 13 5.25% 14 5.50% 15 5.75%
A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.00% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,652.13 5 Down Payment $30,000.00 Total Interest $121,859.98 6 Loan Amount 235,000.00 Total Cost $386,859.98 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% $1,652.13 $121,859.98 $386,859.98 13 5.25% 14 5.50% 15 5.75%
A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.25% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,684.02 5 Down Payment $30,000.00 Total Interest $128,748.21 6 Loan Amount 235,000.00 Total Cost $393,748.21 7 Interest Rate Schedule (Data Table) $407,740.46 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% $1,652.13 $121,859.98 $386,859.98 13 5.25% $1,684.02 $128,748.21 $393,748.21 14 5.50% 15 5.75%
A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.50% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,716.24 5 Down Payment $30,000.00 Total Interest $135,708.58 6 Loan Amount 235,000.00 Total Cost $400,708.58 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% $1,652.13 $121,859.98 $386,859.98 13 5.25% $1,684.02 $128,748.21 $393,748.21 14 5.50% $1,716.24 $135,708.58 $400,708.58 15 5.75%
A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.75% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,748.00 5 Down Payment $30,000.00 Total Interest $142,740.46 6 Loan Amount 235,000.00 Total Cost $407,740.46 7 Interest Rate Schedule (Data Table) 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% $1,652.13 $121,859.98 $386,859.98 13 5.25% $1,684.02 $128,748.21 $393,748.21 14 5.50% $1,716.24 $135,708.58 $400,708.58 15 5.75% $1,748.80 $142,740.46 $407,740.46
Adding a Pointer to a Data Table To make the cell where the interest rate is the same as the original interest rate in the loan analysis appear different from the other cells, use conditional formatting. A B C D 1 Loan Calculator 2 Date xxx Interest Rate 5.75% 3 Item Home Years of loan 18 4 Price 265,000.00 Monthly Payment $1,748.00 5 Down Payment $30,000.00 Total Interest $142,740.46 6 Loan Amount 235,000.00 Total Cost $407,740.46 7 Interest Rate Schedule 8 Rate Monthly Payment Total Interest Total Cost 9 $1,748.80 $142,740.46 $407,740.46 10 4.50% $1,589.36 $108,302.37 $373,302.37 11 4.75% $1,620.58 $115,044.51 $380,04451 12 5.00% $1,652.13 $121,859.98 $386,859.98 13 5.25% $1,684.02 $128,748.21 $393,748.21 14 5.50% $1,716.24 $135,708.58 $400,708.58 15 5.75% $1,748.80 $142,740.46 $407,740.46
Amortization Table The purpose of this table is to give pay off amounts at the end of each year of the loan as well as some other useful information. Strips out interest that would have been charged in the years after. For example, a pay off amount at the end of year 10 would not include interest for years 11, 12, and so on.
Year Beginning Balance Ending Balance Paid on Principal Interest Paid 1 235,000.00 227,326.79 7,673.21 13,312.37 2 227,326.79 219,200.56 8,126.23 12,859.35 3 219,200.56 210,594.56 8,606.00 12,379.58 18 20,346.32 0.00 20,346.32 639.26 Beginning Balance Ending Balance Paid on Principal Interest Paid At the beginning of year 1, it is the amount of money borrowed. The Beginning Balance is the initial loan amount in the loan calculator. This is how much you still owe at the end of a period (such as a year). The balance at the end of a year is equal to the present value of the monthly payments paid over the remaining life of the loan. This is how much of your monthly payments actually went to reduce the principle The amount paid on the principal is equal to the beginning balance less the ending balance. This is how much went to the lender for lending you the money for the house. The interest paid during the year is equal to 12 times the monthly payment less the amount paid on the principal.
IF function in the amortization table You are doing an amortization table built to accommodate 25-year loans. You want to be able to use this worksheet for shorter loans as well, such as a five-year car loan. In an amortization table built for 25-year loans, a loan of five years would result in negative numbers showing for years 6 and beyond, all the way down to year 25 in the table. The ending balance should be 0 in the rows for the years beyond the end of the loan, in other words, years 6 through 25. You can use an if function to show 0 instead of negative numbers in the rows for years beyond year 5.
Protecting a Worksheet Prevents someone else such as a vacation replacement or trainee or someone who is just distracted from accidentally destroying your worksheet. You can lock that person out of certain cells. Designate those cells that you want to be unprotected. Then protect the entire worksheet.
Formatting with borders and fill 2 3 1 Use the features in this dialog box in a certain order. Select color, then line style, then the line itself or a preset.