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Does this Excel Formula look right based on the problem given?

  1. #1
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    Does this Excel Formula look right based on the problem given?

    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.
    Attached Files Attached Files

  2. #2
    MoneyMaker
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    Re: Does this Excel Formula look right based on the problem given?

    Every thing looks right to me
    Why do you think the number of years you calculated is high

  3. #3
    Administrator FDibbins's Avatar
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    Re: Does this Excel Formula look right based on the problem given?

    homework assignment?
    1. Use code tags for VBA. [code] Your Code [/code] (or use the # button)
    2. If your question is resolved, mark it SOLVED using the thread tools
    3. Click on the star if you think someone helped you

    Regards
    Ford

  4. #4
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    Re: Does this Excel Formula look right based on the problem given?

    Yeah. It's an assignment. Just want it to be sure.

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