Microsoft Office Tutorials and References
In Depth Information
Examples of Common Household Loan and Investment Functions
Examples of Common Household Loan and Investment Functions
Although Excel is popular with banking and investment professionals, it is
handy for just about anyone who deals with financial transactions. This
first section of the chapter applies to anyone who is planning to buy a car
or a house. With a little preplanning with Excel, you can build simple work-
sheets that enable you to calculate various monthly payments for various
loan amounts.
You need to keep in mind two universal rules when dealing with all financial
functions:
Make sure your time units are consistent. If you calculate a
monthly loan payment, the interest rate argument should be expressed
as a monthly figure. Most interest rates are quoted as an annual fig-
ure, such as 4%. To convert to a monthly figure, divide 4% by 12.
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