Question

• Annual Interest Tumi • Loan Duration in Years • Payment per Period • Present Value • Future Value worksheet, merged and include the title TZEdge Advertising Options on your workshe the appropriate data an listed. For all options ised as the compounding pe ounding period costing $65,000. This equal quarterly install calculate the annual interest rate r $55,000 and indi- nis amount, with fixed is option, you need to centered over the data. Using the information provided for the options, enter the app alculations for each (across the row) so that all information is lister assume that the payment period dura nd that payments are made at the end of each period. • Option 1-TNC Executives Inc. has proposed a campaign costing $6 agency will accept full payment over the next two years in equal a ments of $8,500. For this option, you need to calculate the annuali • Option 2-Hicks & Bradshaw has designed a campaign for $55,000 cated that it will charge a 6.5% annual rate of interest on this amount monthly payments paid out over the next 18 months. For this option calculate periodic payments. • Option 3—AdWest Inc. has proposed an ad campaign costing $44.000 agency is willing to accept semi-annual payments of $9,200 until the cam paid off. AdWest Inc. will charge a 6.25% annual interest rate. For this onti need to calculate the duration in years that will be required to pay off this del Option 4 _Johnson Bellview & Associates has shown the marketing group excellent campaign that will cost $1,500 a month for the next three years agency's payment terms are based on an annual interest rate of 5%. For this ont you need to calculate the initial value of this advertising campaign. until the campaign is rate. For this option, you 5. In an adjacent column, calculate the total yearly payments required for each option 6. Format your worksheet so that it is easy to read. Be certain that dollars and percent- ages are included where appropriate and that columns display consistent numbers of decimal places (line up decimal points). Wrap text, as necessary, to format the column headings within reasonable column widths. Highlight cells with the data outputs. 7. In a row below your data, select an option to recommend if you were trying to mini- mize the yearly outlay for this campaign. Label and highlight your recommendation in pink 8. Save and close the Advertising.xlsx workbook.
Succeeding in Business with Microsoft Excel 2013. Chapter 6, Steps to Success Level 1

Answer 1

Option 1				Total Yearly Payments
Amount	In $	pv	65,000
Interest rate (quarterly)		rate	1.02%
Period		nper(4 quarter for 2 years)	8
PMT(rate,nper,pv)	In $	Periodic quarterly payment	-8,500	-34,002
Annual Interest Rate			4.1%
Option 2
Amount	In $	pv	55,000
Interest rate (Monthly)		rate	0.54%
Period		nper(18 Months)	18
PMT(rate,nper,pv)	In $	Periodic Monthly payment	-3,215	-38,582
Recommendation : In order to minimize the annual outlay, we should make monthly payments
instead of quarter / semi annual payments
Option 3
Amount	In $	pv	44,000
Interest rate (semi annually)		rate	3.13%
Period		nper(semi annual payments)	5.26
PMT(rate,nper,pv)	In $	Periodic semi annual payment	-9,201	-18,402
Duration in years		(5.26 divided by 2)	2.63
Option 4
Amount	In $	pv	50,050
Interest rate (Monthly)		rate	0.42%
Period		nper(36 Months))	36
PMT(rate,nper,pv)	In $	Periodic Monthly payment	-1,500	-18,001
Initial value of Advertising campaign			50,050