Enter 3500 as her loan principal in cell B4 Enter her 24% interest rate in cell C4 (only include the number, no no 96 sign) % Enter her 24 months loan term in cell D4 In cell H4 under "Extra Payment Date use the dropdown to select January 2025 In cell 14, under "Extra Payment Amount", enter the extra money that she will be contributing beyond her usual payment. 6. Now review the row for January 2025 in the amortization table.You should see that there is now a one-time payment of 285.05 for that month. a. How did the extra, one-time payment of 100] ffect the total interest Janet pays on the loan? b. What was the impact on the number of months it will take Janet to pay off her loan? 7. This new calculation has Janet curious -if she'd been making 285.05 payments for the entire duration of the loan You can apply the payment to all rows of the table by checking the box in cell )4. a. What would be the impact on the total interest Janet would have paid? b. What would be the impact on the number of months to pay off the loan? 8. Uncheck the box in cell 34 to reset Janet's loan back to 3500,24% interest, and no extra payments. This time around let's see what happens if her pay-off goal was 4 years (48 months) instead of 2 (24 months) a. What is Janet's new monthly payment?

Question

Enter 3500 as her loan principal in cell B4 Enter her 24% interest rate in cell C4 (only include the number, no no 96 sign) % Enter her 24 months loan term in cell D4 In cell H4 under "Extra Payment Date use the dropdown to select January 2025 In cell 14, under "Extra Payment Amount", enter the extra money that she will be contributing beyond her usual payment. 6. Now review the row for January 2025 in the amortization table.You should see that there is now a one-time payment of 285.05 for that month. a. How did the extra, one-time payment of 100] ffect the total interest Janet pays on the loan? b. What was the impact on the number of months it will take Janet to pay off her loan? 7. This new calculation has Janet curious -if she'd been making 285.05 payments for the entire duration of the loan You can apply the payment to all rows of the table by checking the box in cell )4. a. What would be the impact on the total interest Janet would have paid? b. What would be the impact on the number of months to pay off the loan? 8. Uncheck the box in cell 34 to reset Janet's loan back to 3500,24% interest, and no extra payments. This time around let's see what happens if her pay-off goal was 4 years (48 months) instead of 2 (24 months) a. What is Janet's new monthly payment?

Answer 1

To answer these questions, we need to understand the concept of loan amortization and how extra payments affect the loan.a. The extra one-time payment of

285.05 payments for the entire duration of the loan, the impact on the total interest she would have paid would be that it would be lower. This is because the extra payment would have been applied to the principal balance more frequently, which would have reduced the amount of interest that accrues over time.b. The impact on the number of months to pay off the loan would be that it would be reduced. This is because the extra payment would have helped to pay down the principal balance faster, which means that there would be less interest that accrues over time.8. If Janet's pay-off goal was 4 years (48 months) instead of 2 (24 months), her new monthly payment would be higher. This is because the longer the loan term, the more interest will accrue over time, which means that a higher monthly payment would be required to pay off the loan in a shorter period of time.

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