MAT 144 Topic 1 DQ 1
For this DQ, please complete the attached spreadsheet, which provides practice in working with Excel formulas and using formatting in Excel.
1Compound Interest Formula (Example)
Symbolic Formula in Excel Format Interpretation
A(t) = P*(1+r/n)^(n*t)
Sample problem: An initial balance of $4,000 grows at a rate of 12.3% compounded quarterly. What is the balance after 5 years?
Inputs: Formatting instructions:
P = ??r = ??n = ??t = ?? Dollar amounts: format as Currency with 2 decimal places
$4,000.00 12.3%45 Rate: format as Percentage with 1 decimal place
Application of the formula to the inputs: A(t) = ??$7,330.39Periods/Years: format at Number with 0 decimal places
Future Value of Periodic Payments
Symbolic Formula in Excel Format Interpretation
A(t) = P*((1+r/n)^(n*t)-1)/(r/n)
Inputs: Formatting instructions:
P = ??n=??r=??t=?? Dollar amounts: format as Currency with 2 decimal places
$250.00 126.20% 7 Rate: format as Percentage with 1 decimal place
Application of the formula to the inputs: A(t) = ??$26,211.06Periods/Years: format at Number with 0 decimal places
Loan Payment Formula
Symbolic Formula in Excel Format Interpretation
PMT = P*(r/n)/(1 - (1 + r/n)^(-n*t))If an initial amount P grows at an annual rate r with n compoundings per year, then the value A(t) of that amount after t years is given by the right-hand side of the formula.
If an amount P is contributed at the end of each of n periods per year and the balance earns interest at an annual percentage rate of r, the total amount A accrued after t years is given by the right-hand side of the formula.
Sample problem: An amount of $250 is contributed at the end of each month, and the balance earns interest at an APR of 6.2%. What is the total amount accrued after 7 years?
The amount PMT that must be paid n times per year for t years to pay off a loan principal amount of P at an APR of r is given by the right-hand side of the formula.
Sample problem: What is the monthly payment amount needed to pay off a loan principal amount of $10,000 over 4 years, given an interest rate of 7.3%?Topic 1 DQ 1 For this DQ, you will practice creating Excel formulas from symbolic formulas and formatting cells. The formulas here are all ones you will be using in this class.
For each of the symbolic formulas given below in Excel format, you will identify inputs from an example statement and apply the formula in Excel, using appropriate cell references. Format cells with numeric values as indicated in the "Formatting instructions" sections.
Pay attention to the legend at the right. Your entries should be text, numeric, or formulas as indicated by the color-coding in the spreadsheet.
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