Programs: Microsoft Excel : Lesson 2

    

Lesson 2

Main Objectives:

  • PMT Function

  • Paste Function

Lesson 2: PMT & Paste Functions

Objective # 1 PMT Function

Used in Financial Decisionn Making

nNeeds three values to compute the payments on the loan
  1. nThe interest rate period
  2. nThe number of periods
  3. nThe amount of the loan
n
nExample =PMT(.05/12,24,-10000)
n.05/12 = interest rate period = annual rate divided by 12
n24 = number of periods = 2 years * 12 months in a year
n10000 = amount of loan, entered as a negative amount
=PMT(B5/12,B6*12,-B4)
nUse cell numbers to calculate terms of a specific loan
nB5 contains the interest rate
nB6 contains the the period in years
nB4 contains the amount of the loan
Objective # 2 Paste Function
nPurpose
nTo be able to select arguments for the function that you typed
nHow to use the Paste Function
nOnce you have put a formula in a cell, click the symbol that looks like a italicized f with a star next to it that is to the right of the formula bar.
nThe ‘paste function dialogue box’ should now appear.
nSelect which function you would like to use (we will be using the PMT function).
nThen type in the arguments. (In the PMT function, you only need to insert arguments for the first three.)
nThe formula bar should say the function you selected times the three arguments you just put in and then the cell in which you selected.

DEMO PROBLEM

After Completing the Analysis of a car loan  demonstration problem, you should master the PMT Function 

Excercises

1. The PMT function uses formulas to calculate the final price.

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   True        False

2. You can figure out the Monthly payment without putting in the Price of the car

   True        False

3. The Monthly payment will not change if the Interest rate is changed.

   True        False

4. The Manufacturer’s rebate and Down Payment are added to the Price of the car to calculate the Amount to finance.

   True        False

5. The Goal seek command sets the Monthly payment as a standard and changes other variables in order to reach that goal.

   True        False

6. There are only 6 function categories to choose from

   True        False

7. When using the PMT function, you have to use all 5 arguments

   True        False

8. To activate the PMT function, you have to type an equal sign in a cell

   True        False

9. When typing in an interest rate, you divide the interest by 12

   True        False

10. The amount of a loan when using the PMT function is entered as a positive number

   True        False

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back to lesson 1

continue to lesson 3

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Programs: Microsoft Excel: Lesson 2