Homework Answers
| Effective interest rate is 13% so to find out nominal rate we use excel function 'NOMINAL' inputs to the functions are effective interest rate and compounding periods which is 4 times in our case as we are calculating quarterly payments, and we will get quarterly interest rate by dividing nominal rate by 4 | ||||||
| =NOMINAL(0.13,4) | =12.41% | 12.41%/4 = 3.1025% | ||||
| Period | Quarterly Payment | Quarterly Principal Payment | Quarterly Interest Payment | |||
| 1 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,1,11,-20000) | $ 1,553.34 | =IPMT(0.031025,1,11,-20000) | $ 620.50 |
| 2 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,2,11,-20000) | $ 1,601.53 | =IPMT(0.031025,2,11,-20000) | $ 572.31 |
| 3 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,3,11,-20000) | $ 1,651.22 | =IPMT(0.031025,3,11,-20000) | $ 522.62 |
| 4 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,4,11,-20000) | $ 1,702.45 | =IPMT(0.031025,4,11,-20000) | $ 471.39 |
| 5 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,5,11,-20000) | $ 1,755.27 | =IPMT(0.031025,5,11,-20000) | $ 418.57 |
| 6 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,6,11,-20000) | $ 1,809.72 | =IPMT(0.031025,6,11,-20000) | $ 364.12 |
| 7 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,7,11,-20000) | $ 1,865.87 | =IPMT(0.031025,7,11,-20000) | $ 307.97 |
| 8 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,8,11,-20000) | $ 1,923.76 | =IPMT(0.031025,8,11,-20000) | $ 250.08 |
| 9 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,9,11,-20000) | $ 1,983.44 | =IPMT(0.031025,9,11,-20000) | $ 190.40 |
| 10 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,10,11,-20000) | $ 2,044.98 | =IPMT(0.031025,10,11,-20000) | $ 128.86 |
| 11 | =PMT(0.13/4,11,-20000) | $ 2,191.59 | =PPMT(0.031025,11,11,-20000) | $ 2,108.42 | =IPMT(0.031025,11,11,-20000) | $ 65.41 |
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