account 2301

Step

Instructions

Points Possible

1

Download and open the excel spreadsheet, Miller-Nobles_7e-13e-Using_Excel_ChF12-ChF14_Start.xlsx. This spreadsheet includes 2 tabs; you will enter all answers on the second tab, ENTERANSWERS. (All answers should be entered in the blue highlighted cells.)

0

2

Patrick’s Delivery Services is buying a van to help with deliveries. The cost of the vehicle is $35,000, the interest rate is 6%, and the loan is for three years. The van is to be repaid in three equal installment payments. Payments are due at the end of each year. Complete the data table. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values. (3 pts)

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3

Using the present value of an ordinary annuity table, calculate the payment amount and complete the amortization schedule. Use the effective interest amortization method. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values. (20 pts) a. Calculate the loan payment by dividing the loan amount by the appropriate present value factor. b. Round values to two decimal places. Calculate the interest expense in the third year as the loan payment minus the loan balance at the beginning of the third year. c. Use absolute cell references and relative cell references in formulas. Use absolute cell references C6 and C19 only to calculate interest expense and payment calculations. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab, you will be marked wrong.)

20

4

Using the Excel PMT function, calculate the payment amount and complete the amortization schedule. Use the effective interest amortization method. (20 pts) a. The PMT function calculates a payment amount that results in a negative number. Reverse this to a positive number for calculations in the amortization schedule. b. Round values to two decimal places. Calculate the interest expense in the third year as the loan payment minus the loan balance at the beginning of the third year. c. Use absolute cell references and relative cell references in formulas. Use absolute cell references C6 and C39 only to calculate interest expense and payment calculations. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab, you will be marked wrong.)

20

5

Once completed, save the project to the desktop. File name can be anything, but DO NOT include spaces. Return to auto-graded excel activity window, and progress to Step 3. Follow on screen instructions. (To review score, navigate to Results in the MyLab and click on Review link.) Hint:

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Total Points

43