calculating term of financial transaction
If I know the amount financed is $1,000 and the interest is $268.91 and the
interest rate is 24% and that is all I know, how do I work out the term of the loan? In this example the answer is 24months but I would like to know how to use an excel function to achieve the result. I am assuming I don't know the instalment Regards -- bookman |
You can use a combination of CUMIPMT and Goal Seek.
First, in, for example, a1, enter the formula: =CUMIPMT(24%/12,a2,1000,1,a2,0) When a2 has the correct term, this function will calculate the total interest of the loan. Use Goal Seek to vary a2 until a1 returns $268.91. -- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... If I know the amount financed is $1,000 and the interest is $268.91 and the interest rate is 24% and that is all I know, how do I work out the term of the loan? In this example the answer is 24months but I would like to know how to use an excel function to achieve the result. I am assuming I don't know the instalment Regards -- bookman |
This should work in principle but I didn't get the expected result.
But anyway thanks for your help Bookman -- bookman "Fred Smith" wrote: You can use a combination of CUMIPMT and Goal Seek. First, in, for example, a1, enter the formula: =CUMIPMT(24%/12,a2,1000,1,a2,0) When a2 has the correct term, this function will calculate the total interest of the loan. Use Goal Seek to vary a2 until a1 returns $268.91. -- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... If I know the amount financed is $1,000 and the interest is $268.91 and the interest rate is 24% and that is all I know, how do I work out the term of the loan? In this example the answer is 24months but I would like to know how to use an excel function to achieve the result. I am assuming I don't know the instalment Regards -- bookman |
What result did you get? Let us know so we can help you get what you want.
-- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... This should work in principle but I didn't get the expected result. But anyway thanks for your help Bookman -- bookman "Fred Smith" wrote: You can use a combination of CUMIPMT and Goal Seek. First, in, for example, a1, enter the formula: =CUMIPMT(24%/12,a2,1000,1,a2,0) When a2 has the correct term, this function will calculate the total interest of the loan. Use Goal Seek to vary a2 until a1 returns $268.91. -- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... If I know the amount financed is $1,000 and the interest is $268.91 and the interest rate is 24% and that is all I know, how do I work out the term of the loan? In this example the answer is 24months but I would like to know how to use an excel function to achieve the result. I am assuming I don't know the instalment Regards -- bookman |
Actually I can't gwet it to work.
If I put the CUMIPMT function in Cell a1 with a reference to cell A2 then goal seek set a1 t0 -268.91 by changing cell A2 if iI leave A2 blank it won't work at all If I put a number (eg 10) in cell A2 I get a different result each time when I know in this case the correct solution is 24 Regards Bookman -- bookman "Fred Smith" wrote: What result did you get? Let us know so we can help you get what you want. -- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... This should work in principle but I didn't get the expected result. But anyway thanks for your help Bookman -- bookman "Fred Smith" wrote: You can use a combination of CUMIPMT and Goal Seek. First, in, for example, a1, enter the formula: =CUMIPMT(24%/12,a2,1000,1,a2,0) When a2 has the correct term, this function will calculate the total interest of the loan. Use Goal Seek to vary a2 until a1 returns $268.91. -- Regards, Fred Please reply to newsgroup, not e-mail "bookman3" wrote in message ... If I know the amount financed is $1,000 and the interest is $268.91 and the interest rate is 24% and that is all I know, how do I work out the term of the loan? In this example the answer is 24months but I would like to know how to use an excel function to achieve the result. I am assuming I don't know the instalment Regards -- bookman |
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