Financial Functions

Introduction:

As we have seen so far, Excel is very versatile and can be used to calculate and analyze all kinds of data. This week one of the functions we will add to the use of Excel is the PMT function. This function calculates the payments required for a loan or a lease. However, before demonstrating this function, it is important to cover a few fundamental concepts on loans and leases.

A loan is a contractual agreement in which money is borrowed from a lender and paid back over a specific period of time. The amount of money that is borrowed from the lender is called the principal of the loan. The borrower is usually required to pay the principal of the loan plus interest.

Course Competencies:

1. Understand and describe what Excel is and how it is used to work with quantitative data
2. Design, construct, format, and edit workbooks and worksheets for professional use
3. Create and apply formulas and functions to calculate data using appropriate mathematical principles
4. Construct and design charts and tables to effectively visualize and manipulate data
5. Identify and assess the suitable printing and presentation of workbooks and worksheets
6. Utilize data analysis in determining the best possible outcomes of business-related decisions

Learning Objectives:

Each Outcome shows in parenthesis which Course Competency it aligns with.

1. Understand the fundamental principles of leases and loans (1)
2. Construct a worksheet that includes images (2)
3. Calculate the loan payment for leases and purchases utilizing the PMT function (3)
4. Create and enhance the choice of charts by applying formatting changes and additional elements to the chart axes, titles, data labels, and additional text (4)
5. Appraise the workbook for printing issues and apply proper edits and formatting to the finalized workbook in preparation for printing and presentation (5)
6. Determine the best option for a chart to represent the analysis of leases and loans (6)
7. Assess and compare the results of your lease and loan analysis using the PMT function to choose the best option for the business (6)

To-Do List:

1. Week 6 KnowledgePath
2. Week 6 Learning Materials
3. Week 6 Discussion
4. Course lab project – Exercise 6

Sources:

Image attribution: Adapted from How to Use Microsoft Excel: The Careers in Practice Series, adapted by The Saylor Foundation without attribution as requested by the work’s original creator or licensee, and licensed under CC BY-NC-SA 3.0.