### 6.2 Buying Now, Paying Later

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• Math Help

To make a spreadsheet similar to the one in Example 2, use the steps below. It should be noted that while the numbers that are displayed in the spreadsheet are shown to two decimal places, the actual numbers in the calculations may be carried out to more than two decimal places.

1. Enter the titles "Payment Number," "Balance before Payment," "Monthly Interest," "Monthly Payment," and "Balance after Payment" into Row 1.
2. Enter 1 into cell A2.
3. Enter the formula = A2 + 1 into cell A3.
4. Select cell A3. From the Edit menu, choose Copy.
5. Select cells A4 through A61. From the Edit menu, choose Paste.
6. Enter 25000 into cell B2.
7. Enter the formula = 0.08/12*B2 into cell C2.
8. Enter the formula = -PMT(0.08/12,60,25000) into cell D2.
9. Enter the formula = B2 + C2 - D2 into cell E2.
10. Enter the formula = E2 into cell B3.
11. Select cell B3. From the Edit menu, choose Copy.
12. Select cells B4 through B61. From the Edit menu, choose Paste.
13. Select cell C2. From the Edit menu, choose Copy.
14. Select cells C3 through C61. From the Edit menu, choose Paste.
15. Select cell D2. From the Edit menu, choose Copy.
16. Select cells D3 through D61. From the Edit menu, choose Paste.
17. Select cell E2. From the Edit menu, choose Copy.
18. Select cells E3 through E61. From the Edit menu, choose Paste.

To format the cells, use the steps below.

1. Select cells B2 through B61.
2. From the Format menu, choose Cells....
3. In the Format Cells dialog, select the Number tab.
4. From the Category: list, select Currency.
5. For Decimal places:, enter 2. For Symbol, choose \$ from the drop down list. Then click OK.
6. Repeat Steps 1-5 for cells C2 through C61, cells D2 through D61, and cells E2 through E61.
• Consumer Suggestion

Taking out a loan can be confusing and overwhelming. If you plan on taking out a loan to make a major purchase in the future you might want to check out Yahoo Finance, where you can find a wealth of information about loans. The site includes

• news articles pertaining to loans
• various loan calculators
• how-to guides for many different loan and debt situations

and many other features.

• Checkpoint Solution
1. You pay So, the interest paid is
2. If the annual percentage rate is 9%, then your monthly payment is

So, the interest paid is

If the annual percentage rate is 10%, then your monthly payment is

So, the interest paid is

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