# Module 02 modeling assignment – loan amortization table

You work for We Build the World Manufacturing Inc. The company has decided to get a three year loan to purchase a high end lathe for \$1M. The current interest rate is 6%. Your job is to calculate the monthly interest payments by building a loan amortization table.

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The model should have three areas:

1. Documentation: Explaining the purpose of the model
2. Input; There are three inputs required for this model, annual interest rate, number of months of the loan, and the loan amount
3. Formula/Output Area: As shown on the example for a \$500 loan for twelve months, the inputs are feeding the calculations in the Formula/Output Area.

Answer the following questions:

• Assuming the original assumptions, how much in interest will the organization pay over 3 years?
• If the interest rate drops to 3%, what impact does that have on interest payments?

Based upon the following story

complete the model criteria in Microsoft Excel

:

The model

should contain the following sections: Description, Inputs, and Formula/Outputs.

You work for We Build the World Manufacturing Inc. The company has decided to get a three

year loan to purchase a high end lathe for \$1M. The current interest rate is 6%. Your job is to

calculate the monthly interest payments by

building a loan amortizati

on table.

Criteria Complete Using Microsoft Excel

Weight

1.Assuming the original

assumptions, how much in interest

will the organization pay over 3

years? 30%

2. If the interest rate drops to 3%,

what impact does that have on

interest

payments?30%

The final model should contain the

following sections: Description, Inputs,

Formula/Outputs.20%

Total Quality (grammar, spelling, and APA

formatting) 20%

Total 100%