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Calculate the Present Value
Calculate the Present Valuea. Calculate the periodic interest rate in cell E3.
b. Calculate the total number of payments in cell E4.
c. In cell E2, calculate the Present Value of an auto loan that has a $450.00 payment, 5.25% annual interest rate, and a 4-year repayment period. The function should return a positive number.
d.Apply the Accounting Number Format to cell E2.
Final answer:To calculate the periodic interest rate, divide the annual interest rate by the number of compounding periods per year. In cell E4, determine the total number of payments, usually calculated by multiplying the number of years by the number of payments per year. Then, in cell E2, use a function to compute the present value of the auto loan, ensuring it returns a positive value.Explanation:Firstly, to calculate the periodic interest rate, divide the annual interest rate (usually expressed as a percentage) by the number of compounding periods per year.For example, if the annual interest rate is 5% and the loan is compounded monthly (12 times per year), the periodic interest rate would be 0.05/12.Secondly, determine the total number of payments by multiplying the number of years by the number of payments per year. For instance, if the loan term is 5 years with monthly payments, the total number of payments would be 5 x 12 = 60.Finally, in cell E2, insert a function to calculate the present value of the auto loan.This function typically involves the loan amount, periodic interest rate, and total number of payments, ensuring it returns a positive value representing the current worth of the loan.Complete qs:Calculate the periodic interest rate in cell Calculate the total number of payments in cell E4. In cell E2, insert a function to calculate the present value of the auto loan. The function should return a positive number....