Before looking at the problem, look at the Loan Analysis.xlsx workbook.
Here's the problem:
Diana is negotiating with the seller and is willing to pay $9,000 per quarter at 7 ½% interest per year compounded quarterly. She will borrow everything but a 10% down payment. Determine how many years it will take to pay off the loan (cell E18). Inputs do not have to be explicitly listed elsewhere.
My Formula (Typed in cell E18): =NPER(K18/H18,I18,E3*G18)/H18
Based on what I've done, I think the number of years is very high. What am I doing wrong and how to correct this?
BTW, the 80% is based on value of building so I added an extra 10% below it to make 90% based on this problem:
The building seller has also offered Diana a private loan for 80% of the value of the building. In return, Diana must pay $14,000 per quarter for the next 10 years. Determine the annual interest rate being charge (cell E17). Inputs do not have to be explicitly listed elsewhere.
Bookmarks