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Introduction To Problem Solving
Introduction To Problem Solving
Introduction To Problem Solving
0XH
Problem Statement
Jayne is a sophomore in college. Her education abroad class is going to England and Wales to learn
about the engineering used to construct castles and cathedrals. While Jayne is there, she is going to
travel around a bit with some of her friends. Between flights, food, and lodging, the trip will cost $4500.
Jayne decides to put the trip on her credit card. She never uses the card, and she figures she can make
the minimum payments easily.
Instructions
Using Excel, follow the instructions below to calculate how long it will take Jayne to pay off the card,
how much will be paid toward principal, and how much will be paid toward interest.
=B1-C4
b. For months 1 and on, the new balance will be calculated using the following equation.
APR
Balance=Previous Balance × 1+ ( 12 )
−Current Month Payment
You will need to use both absolute and relative referencing to calculate the balance. Do not type
the APR value in directly; changing the value in cell D1 should change the values in the Balance
column. Also note that the Current Month Payment will eventually be listed in column C.
Type one formula into cell B5 and fill down. (Hint: double click on the lower right corner of the
cell when your cursor looks like a plus sign.) Enter the exact formula you entered in B5 in the
box below.
=B4*(1+(D$1/12))-C5
4. Fill column C with the Monthly Payment information. Monthly payments may be calculated slightly
differently by different institutions. For this spreadsheet, starting with C5, use the minimum
payment percent from F1 multiplied by the previous month’s balance. Note that the monthly
payment has a minimum value of $30. Once the calculated monthly payment goes below $30,
override the calculated value manually. Enter the exact formula you entered in C5 in the box
below. Your cell value should change if the value in F1 is modified.
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APP C03-1: Excel – 1 – Introduction & Problem Solving ENGR 1281.0XH
=F$1*B4
At some point, the balance column will go negative. In that row, modify the monthly payment (you
can just type in a number) such that the corresponding balance is 0. Enter the address of the cell
you modified and the value you entered in the box below. Delete all values and formulas below
this point.
563 22.74
5. The Total Paid column should be a running sum of the monthly payments. Leave the 0 in cell D4,
and then enter a formula in D5 that uses cell referencing and fill the rest of the column to populate
with the appropriate values. Enter the exact formula you entered in D5 in the box below.
=C5+D4
6. Starting with month 1, the amount paid Toward Interest each month is given by the following
equation.
E5 =B4*(D$1/12)
F5 =C5-E5
7. Using cell referencing, find the necessary values for cells K5, K6, and K7. Fill in the table below.
K5 =SUM(F5:F563) $4500
K6 =SUM(E5:E563) $23,095.88
K7 =553/12 46.08
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APP C03-1: Excel – 1 – Introduction & Problem Solving ENGR 1281.0XH
8. When was the first month that Jayne paid more toward the principal than the interest?
520
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APP C03-1: Excel – 1 – Introduction & Problem Solving ENGR 1281.0XH
9. What percentage of the loan amount did Jayne end up paying in interest?
513.24%
Document
Generate a PDF of this document and submit to Carmen according to the DAL.
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