Excel Financial Functions

Question

Assume the same data as provided in question #4. How much would you have to pay each month to pay off

the loan in 10 years?

Data from question #4: Time for a new problem. You want to borrow $200,000 at 4% interest compounded monthly. If you can

afford to make monthly payments of only $1200/month, how many months (cell J14 on the sample output)

will it take you to pay off the loan completely? How many years (cell K14 on the sample output)?

Answer 1

Given the following data:

The monthly payment would be: PMT(Interestrate/12,years*paymentsperyear,borrowedmoney)=(4%/12,10*12,200,000)=$2,024.90

Regarding 2nd question, if you pay $1200/month it would take 243 months (20.25 years) to pay off the debt. The total interest would be $92,418.87 total in 243 months.