Assignment 8

Exercise 1:
She won’t be able to afford the loan on a 15% interest rate as the monthly payment for the loan would be R -2379.99 which is R 178.00 over her monthly projected budget for the loan.
Top of Form
DataBottom of Form
Description
15%
Annual interest rate
60
Number of months of payments
100000
Amount of loan
Formula
Description (Result)
R -2 378.99
Monthly payment for a loan with the above terms

Exercise 2:
1. Can she afford the loan if the annual interest rate is 10%? Yes
2. Can she afford the loan if the annual interest rate is 11%? Yes
3. Can she afford the loan if the annual interest rate is 12%? No

Top of Form
DataBottom of Form

Description
10%
11%
12%
Annual interest rate
60
60
60
Number of months of payments
100000
100000
100000
Amount of loan
Formula

Description (Result)
R -2 124.70
R -2 174.24
R -2 224.44
Monthly payment for a loan with the above terms. Exercise 3:
Use the What if Analysis tool in Excel 2010 to find the value of the largest annual interest rate that will allow R2200 to cover entrepreneur’s payment on principal plus interest.
Loan Amount
R 100 000.00
Term
60
Interest Rate
11.51%
Payment
R -2 200.00
Exercise 4:
If she could only pay R1800 per month, the annual interest rate would have to be less than what value in order for her to afford the loan? Find your answer by doing another What if Analysis. What value did you find?
Loan Amount
R 100 000.00
Term (Months)
60
Intrest Rate
3.07%
Payment
R -1 800.00 Exercise 5:
If she could pay R2500 per month, repeat a What if Analysis to find the value of the annual interest rate that will allow R2500 to cover the payment on principal plus interest. Explain why the interest rate you obtain is larger than the interest rate you obtained in Exercise 4.
Loan Amount
R 100 000.00
Term (Months)
60
Intrest Rate
17.27%
Payment
R -2 500.00

Exercise 6:
Total Profit = R 40*5 + R 35*10 + R 30*5 + R50*10 = R 1200
Ascent
Exercise 7:

B
C
D
E
F
G
H
1

Light
Dark
Ale
Premium

2
Profit
40