Calculating the amount of principal you’ve paid on a loan lets you determine the amount of equity you have in a purchase. You can also calculate interest paid.
- [Instructor] Calculating the amount of principal…you've paid on a loan lets you determine…the amount of equity you have in your purchase.…That would be your down payment,…plus loan principal and depreciation if any.…You can also determine what your new monthly…payment would be if you refinanced the loan…at a specific interest rate for a given length of time.…In this movie I will show you how to…calculate the interest and principal components…of loan payments.…My sample file is Principal and Interest…and that is an Excel file…that you can find in the chapter one folder…of the exercise files collection.…
To calculate the interest and principal components…of loan payments you need to know several…pieces of information.…The first is the loan rate.…In this case we're assuming something…like a short term construction loan,…which has A typically high rate.…In this case 10.25%.…The loan will be paid off over 24 periods,…those periods represent months,…so we will need to divide the rate of 10.25% by 12.…The value of the loan is $350,000.…
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- Calculating the effect of interest rates and inflation
- Finding the arithmetic and geometric means of growth rates
- Calculating the future and present value of an investment
- Calculating loan payments for a fully amortized loan
- Calculating the effect of paying extra principal with each payment
- Finding the number of periods required to meet an investment goal
- Calculating net present value and internal rate of return
- Building a cash tracking worksheet
- Visualizing cash flows using a waterfall chart