CS 107 Introduction to Data Processing Spring 2006 MS Excel Car Loan Assignment

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Congratulations!! You've graduated and gotten your first real job!! Now, you need a new car. You estimate you can pay up to $500 per month on a car and you've found 3 different cars that you like. Now, you have to see if you can afford any of them. The finance information for the three cars are: Car A Car B Car C Car Cost $15,350 $20,977 $23,499 Interest Rate 7% 7.5% 8% Years to Pay 3 4 3 Using MS Excel and the PMT function, see which car you can afford. Next, set up an amortization table using the IPMT and PPMT functions to see how much of each payment will go to interest and how much will go to the principal. Time for some What-If You originally planned on financing the entire cost of the car, but if you decided to take the $2,000 you got for graduation and for working over the summer and use it as a down payment. How would that effect your choice? If you could reduce the interest rate by one-half a percent, how would that effect your decision? Suppose you could extend your payments for an extra year. Show how each of these possibilities effects your calculations. Next, use Excel's Goal Seeking to check what the interest rate, payment period, and principal would have to be on the car or cars you cannot afford, if you set the monthly payment to $500. What to turn in Two copies of your spreadsheet; one with values and one listing the formulas you have used. The printouts should have your name and the name of this project in the header. Use what ever formatting you wish to enhance your work.

Last Updated: 3/27/06