In this formula the formula looks to cell c14 and

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Unformatted text preview: eciation then it determines period depreciation and precludes the violation of salvage value. When utilizing this worksheet you can put in period activity to determine period depreciation. The option of entering annual data and having Excel divide that value into 12 evenly valued units for monthly data entry is provided. A monthly input matrix is also provided. Then the worksheet subtracts accumulated depreciation from cost to get book value. This worksheet does not utilize the concept of “If” statements referencing the life or period column since they are not relevant to units of activity depreciation. Chapter 15 LOANS AND THE TIME VALUE OF MONEY Chapter Outline Cash Flow Within Formulas Loan Payments Payment To Principle Cumulative Payment To Principle Interest Payment Cumulative Payment To Interest Present Value Future Value Bond Table Cash Flow Within Formulas There are many formulas within Excel, particularly those regarding the payment of notes payable – “PMT”, notes payable interest payments – “IPMT”, and notes payable principle payment – “PPMT” that are sensitive to cash flow issues. For example, the formula to calculate the payment for a notes payable issue would be “=PMT(interest rate for the compounding period, the life of the note payable in the same periodicity as the interest rate, the principle amount, the future value or balloon payment, and whether the payment is made at the end of the interest period – 0, or at the beginning of the interest period – 1. In cell D19 on the Basic Formulas tab of the Basic Data and Formulas workbook the formula is written as =PMT(C14/12,C15*12,C16,C17,C18). In this formula the formula “looks to” cell C14 and divides the value that it finds there by 12 to get the monthly interest rate, it looks at cell C15 to get the life of the note payable in years and multiplies it by 12 to get the life in months – IMPORTANT: The interest rate must be in the same periodicity as the life of the note payable as shown here – months. It may...
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