Microsoft Office Tutorials and References

In Depth Information

**Figuring Loan Calculations**

5. Enter
/12
to divide the annual interest rate to get the monthly

interest rate.

6. Enter a comma (
,).

7. Click the cell where you entered the principal, or just enter the cell

address.

8. Enter a comma (
,).

9. Click the cell where you entered the payback amount, or just enter the

cell address.

10. Type a
), and press Enter.

Figure 5-6 shows how I set up a worksheet with values and used the

PDURATION function to find out how many payments are necessary to pay

off a loan. In this example, we assume that the amount paid off is $4400

(includes principal and interest). The amount borrowed is $4,000, and the

annual interest rate is 6 percent.

The number of payments is 22.92, so I’ll call that 23 payments, just under 2 years.

Figure 5-6:

The

PDURATION

function

calculates

the number

of payments

for a loan.