Loan payments excel has numerous formulas that

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Unformatted text preview: knows the cash flow as in when the note payable was signed and he knows the cash flow for payment is out or negative and he wants positive values for a “nice” presentation. One option is to write the formula with an additional factor imposed making the input negative within the formula or making the result positive through a secondary formula. In the case of making the principle negative, it is understood that the principle upon initiation will always be shown as a positive number. By adding “*(-1)” to the principle portion of the formula, cell C16 as shown here =PMT(C14/12,C15*12,C16*(-1),C17,C18) and as shown in cell D29, the result will be positive if the principle value in cell C16 is positive. However, if the value in C16 is negative, cell D29 will be negative since it multiples the principle value by negative one making it a positive principle and Excel states positive principles have negative payments. To solve this issue you can add a secondary formula making an absolute value of the answer regardless of the input values through “ABS” as shown here =ABS(PMT(C14/12,C15*12,C16,C17,C18)) and in cell D31. With this secondary formula, Excel works from the inside parentheses outward solving the payment formula first than making the result of the payment formula an absolute value – always positive through the “ABS” additional. Notice that the *(-1) is not required or utilized in this formula. Remember that features making the results of cash flow sensitive formulas always positive may be nice looking and may be required by “The Boss”, they are theoretically incorrect and may present a loss of points on homework and criticism on publicly released information. Loan Payments Excel has numerous formulas that address loan payments. The most commonly used formula is the “PMT” (Payment) formula. This formula is under the “Financial” category. With “PMT” you provide Excel with the period interest rate, the number of periods, the present value, the future value if any, and determine...
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This note was uploaded on 09/19/2010 for the course ACCT 220 taught by Professor Ullmann during the Fall '10 term at University of Nebraska Kearney.

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