excel question Q:For Interest Rate use the VLOOKUP function where the Interest r

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excel question

Q:For Interest Rate use the VLOOKUP function where the Interest rate is based on the Credit Rating and the External Data Table.

that's all the question and the information that i have. kind of confuse

CUSTOMER INFORMATION EXTERNAL DATA Credit Rating Value rating 2 Customer Name 3 Random Number 4 FICO Credit Rating 5 500 600 700 800 Interest Rate 8.00% 6.00% 5.00% 4.00% 000-00-0000 620 3/01/2016 Application Date 6 Today's Date 16/3/21 22:34 LOAN INFORMATION 250,000.00 3,000.00 1,000.00 Purchase Price 10 Down Payment 11 Assessment 12 13 Loan Amount 14 Loan Term: 15 Interest Rate 16 Payment 17 Additional Principal 18 If the credit rating is increased to 710, what is the change to the payment amount? At 710 credit rating, how does an additional $300 to the principal affect the duration of the loan? When is the debt paid off now compared with no additional payment to the principal? 248,000.00 30.00 years per year per month per month otai Total Running Principal Interest Principal Additional Running 19 20 Month Beginning Balance Paid Paid Principal Interest Ending Banalce

Explanation / Answer

we know that interest rate as per given credit rate of 620 is 5%.

Now interest will be Amount=P(1+R/100)^n

Now P = 248,000 R=5% n=30 years.

Amount = 1071841 as per the interest payable after 30 years.

Per month the user has to give 2977.33 as installement of the loan. Same can be used in excel sheet for computation.

Now if the credit rating is increased to 710 the interest rate will be 4%

So new amount will be = 804362

Monthly installment will be = 2234. The payment will decrease for the owner.

It will increase the montly payment slightly.

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