Finance

Complete each task by inserting the appropriate function, referencing the appropriate cells in the task data, in the specified cells.

Task Description

Howard has decided to investigate purchasing a warehouse to store his inventory and prepare customer orders. What will his monthly payment be if he takes out a $540,000 mortgage for 30 years (360 months) at 5.25% interest? (Please reference the loan information in the "Task 1 Data" cells in your functions.)

The loan officer tells Howard that his monthly mortgage payments on the warehouse will be $3593. He thinks this is too high given his calculations for task 1. Use the PV function in cell F11 to calculate the loan amount that would correspond with a $3593 monthly payment for 360 months at 5.25% interest. (Please reference the loan information in the "Task 2 Data" cells as the arguments for your function.)

Convinced now that the payment amount quoted by the loan officer is too high, Howard worries that he is being charged more than 5.25% interest. Use the rate function in cell C23 to calculate the nominal interest rate for a $540,000 loan with 360 monthly payments of $3593. (Please reference the loan information in the "Task 3 & 4 Data" cells as the arguments for your functions.)

What is the effective annual rate of the loan you worked with in task 3? (Please reference the loan information in the "Task 3 & 4 Data" cells as the arguments for your functions.)

Howard is considering leasing part of his new warehouse space to another company for three years. He can lease the space for $500 a month. He estimates that he can earn 10% return by investing this money into his business. What is the future value of leasing this portion of his warehouse space to another company? (Please reference the loan information in the "Task 5 Data" cells as the arguments for your function.)

Howard wants to know how much money the higher than expected interest rate will cost his company over the course of the loan. Calculate the monthly payment for the loan at 5.25% interest rate. (Please reference the loan information in the "Task 6-8 Data" cells as the arguments for your functions.)

Howard wants to know how much money the higher than expected interest rate will cost his company over the course of the loan. Calculate the monthly payment for the loan at 7% interest rate. (Please reference the loan information in the "Task 6-8 Data" cells as the arguments for your functions.)

How much money will Howard save if he is able to negotiate the 5.25% interest rate instead of the 7% rate quoted by the loan officer? (Please reference the total payment amounts in cells C39 and D39 to calculate the difference.)

Data