6. Understanding Loans

A Loan Calculator
We created a Loan Calculator using some basic loan data - amount, interest rate, and duration in years - along with Cell Names and the PMT Financial Function. The PMT Function is a powerful tool in Excel. Knowing how to use it will help you to analyze loans to see whether the conditions of a particular loan are good for you or not.

We used a interesting technique, Naming Cells. This operation has two very distinct advantages: first, it allows us to create a formula using words in English rather than simply using Cell References, which can sometimes be confusing; second, the cell's name actually is an Absolute Reference, wherever and however it is used in your worksheet!!

Materials Covered: MS Excel - Project 4:
Financial Functions, Data Tables, and Amortization Schedules, pp 266-283