1. Math
  2. Mathematics
  3. question 1 tiffany owns an event management business that is...

Question: question 1 tiffany owns an event management business that is...

Question details

Question 1: Tiffany owns an event management business that is currently operating from her garage. She would like to transform her guest room into a home office. However, she does not have her own capital to invest and will need to raise $10,000 to renovate and refit the room. Tiffany is considering taking a loan for the required amount for her renovation. Her local bank charges 7.8% per year compounded quarterly and requires quarterly repayments. The bank offered Tiffany a one-year interest-only option with her three-year loan. This means that for the first year, every quarter Tiffany would pay only interest on the amount borrowed. Loan repayments consisting of both interest and principal would then commence in the second year continues for the third year.

(a) Prepare an EXCEL spreadsheet that shows the end-of-the quarter balance in Tiffany’s loan account over the next three years. In addition, use your amortisation schedule to calculate the total interest and the total amount paid over the life of the loan. Attach a copy your spreadsheet into your assignment submission.

EXCEL Instructions:Your spreadsheet set-up could look something like this (you will need to use Excel fill in the missing cells):

 
page14image32124912
Refer to Topic 3 in the EXCEL Supplement for instructions on entering formulae in EXCEL.
 

Refer to Topic 4 in the EXCEL Supplement for instructions on how to use financial functions to make annuity calculations.

 

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution