Microsoft Office Tutorials and References

In Depth Information

**Review Questions**

REVIEW QUESTIONS

1.
What would be the monthly payments on a six-year loan of $50,000, with an

interest rate of 6 percent?

2.
A student needs $1,000 a month for college for the next four years. If the interest

rate is 5.2 percent, how much money do his parents have to put away in the

bank today to be able to handle this annuity?

3.
If you are going to retire in 15 years and you are putting away $1,200 a month

with an interest rate of 5 percent, how much money will you have in the bank?

4.
You took a loan of $15,000 with an interest rate of 7 percent and you are paying

$500 a month. How many months will it take you to pay off the loan?

5.
You got a loan of $15, 000 and you are paying it off in three years

36 monthly

payments of $450 each. What interest rate is the bank charging you?

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ANSWERS

1.
Use the PMT function. $828.64.

2.
Use the PV function. $43,252.59.

3.
Use the FV function. $320,746.73.

4.
Use the NPER function. 33.07 months or 2.67 years.

5.
Use the Rate function. A monthly rate of 0.42 percent or 5.06 percent per year.