For this assignment you are going to a) purchase the car of your dreams b) find out why gettin

Start by getting all the formulas working for a car that costs $30,000. Then pick a car and find ou
also need to copy and paste a picture of it below.

You will then take your car and change things like the number of years of your loan and the inte

Steps to complete this. You can save the work in this file but you will need to save it to your "My
1. We will start with a car that costs $30,000. I have placed that into the field already.
2. Lets assume you can afford to pay off 10% of the car when you buy it. Enter 0.1 into that field and format the cell for P
3. Into the down payment cell put a formula to figure out the amount (car cost * Down payment %) USE CELL REFERENC
4. Now calculate the loan necessary (cost-down paymet)
5. Let's start off with payments for 36 months (3 years). Put 36 in the "Months to pay off" field.
6. Interest must be paid on the loan . Let's assume you get a loan for 3% (enter 0.03). Format the "Interest" field for "per
7. Now comes the fun part. You need to calculate how much you need to pay each month. You will use another function
For this function you need to give all sorts of things. You will see that you need the following:
rate - this is the interest rate (which needs to be divided by 12)
nper - number of months
pv - principal value (the amount that you need for the loan which is calculated by the cost - down payment)
fv - the final value (- make this zero!
type - this deals with the payment time. Use a one (1) to say you will pay at the beginning of the month
8. Ok, now figure out the total cost of the loan (monthly payment * number of months). This comes out to be a negative
9. Finally calculate how much more money you spent by getting a loan. (total cost- loan amount)
10. If you've done it right the cost per month should be 783.23 a month, loan cost -> $28,196.44 and amount more than pr
$31,196.44! This is the issue when getting a loan. It costs you more money in the end.
11. When you get those numbers, go to the next line down and try it with your car. Use all the s
formatted for currency. Make sure to do that.

My dream car is: Toyota Prius It costs:

Car cost Down Payment % Down Payment Loan Amount
$30,000.00 10% $3,000.00 $27,000.00
$27,190.00 10% $2,719.00 $24,471.00
$27,190.00 10% $2,719.00 $24,471.00
$27,190.00 10% $2,719.00 $24,471.00
$27,190.00 10% $2,719.00 $24,471.00
$27,190.00 20% $5,438.00 $21,752.00

Ok. Now let's change some things. Use YOUR car cost for all the following.

Add a new line of calculations above for each change . Answer the questions at the far
side when finished. (you will need more formulas!) Change a) corresponds to question a)
etc.
Ok. Now let's change some things. Use YOUR car cost for all the following.

Add a new line of calculations above for each change . Answer the questions at the far
side when finished. (you will need more formulas!) Change a) corresponds to question a)
etc.

a) Change the number of months to 48 ---------------->

b) Change the number of months to 84 (longest loan I've seen) ---------------->
c) You can't get a loan for 84 months at 3 %. Change it to 4% ---------------->
d) Go back to 36 month loan at 3% and increase the down ---------------->
payment % to 20%
eams b) find out why getting car loans are good (you can buy the car now) and bad (you have to pay a fair b

0. Then pick a car and find out how much it costs from the internet. It doesn't have to be perfect - just a rou

ears of your loan and the interest rate you are paying for the car.

ill need to save it to your "My Documents"

y.
nto that field and format the cell for Percent. (right click, "format cells")
own payment %) USE CELL REFERENCES!!!

y off" field.
3). Format the "Interest" field for "percent"
month. You will use another function built into Excel. This function is the "PMT" function.
the following:

he cost - down payment)

inning of the month

ths). This comes out to be a negative amount! ADD a Minus sign in front of the formula to correct that!
loan amount)
$28,196.44 and amount more than principal $1196.44. In other words, you've had to pay an extra $1200 to buy the car. So in fact, the car
d.
it with your car. Use all the same formulas and values for down payment, interest rate and months to pay o

$27,190.00
Months to pay off Interest rate Cost per month Total cost of loan
36 3% -$783.23 $28,196.44
36 3% -$709.87 $25,555.38
48 3% -$540.30 $25,934.32
84 3% -$322.54 $27,093.05
84 4% -$333.38 $28,003.76
36 3% -$631.00 $22,715.89
a) How much more money did you have to spend over the time of the loan compared to 36 months? (your first line with your c
b) How much more money did you have to spend over the time of the loan compared to 36 months? (your first line with your c
c) How much more money did you have to spend over the time of the loan compared to 36 months at 3%? (your first line with
d) How much money did you save over the time of the loan compared to 10% down? (your first line with your car)

e) There are benefits and drawbacks to any loan. What is the benefit of a long loan? What is the problem with a long loan? Pl
now) and bad (you have to pay a fair bit more for the car).

doesn't have to be perfect - just a rough idea of the cost. You'll

orrect that!

n extra $1200 to buy the car. So in fact, the car didn't cost $30,000 it cost

ent, interest rate and months to pay off. Many cells should be

Here is a small picture of my beauty -->

Amount more than principal
$1,196.44
$1,084.38
$1,463.32
$2,622.05
$3,532.76
$963.89
 pared to 36 months? (your first line with your car)
pared to 36 months? (your first line with your car)
pared to 36 months at 3%? (your first line with your car)
down? (your first line with your car)

oan? What is the problem with a long loan? Place answer in a text box
he car).

e cost. You'll

00 it cost

s should be
$378.94
$1,537.67
$2,448.38
$2,839.49

Benefits of a long loan are that you will have

more time to pay back for your car. The
problem with a long loan is that since there
is interest on your loan, the total amount of
money you'll need to pay for your car (down
payment and loans) will cost more overall.