Question

Investor #1 decided to loan you the $300,000, paying all of the interest (8% per year)...

Investor #1 decided to loan you the $300,000, paying all of the interest (8% per year) and principal in one lump sum at the end of 5 years. · Investor #2 offers you the $300,000, paying interest at the rate of 8% per year for 4 years and then a final payment of interest and principal at the end of the 5th year.

how is this inputted in excel formula?

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Answer #1

For Investor 1, function FV can be used. The screenshot of Excel is provided below.

Amount at the end of 5 years to paid = $440,798.2.

For Investor 2

Interest Paid for the first 4 years = 24000

Amount paid in the last year =Interest in the last year + Outstanding Principal

= 300000 + 24000 =324000

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