Part II: Working with Formulas and Functions
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FIGURE 15.3This worksheet calculates the number of payments required to pay off a credit card balance by paying the
minimum payment amount each month.
In this example, it would take about 123 months (more than ten years) to pay off the credit card
balance if the borrower made only the minimum monthly payment. The total interest paid on the
$1,000 loan would be $1,468.42. This calculation assumes, of course, that no additional charges
are made on the account. This example may help explain why you receive so many credit card
solicitations in the mail.Figure 15.4 shows some additional calculations for the credit card example. For example, if you
want to pay off the credit card in 12 months, you need to make monthly payments of $93.23.
(This amount results in total payments of $1,118.81 with total interest of $118.81.) The formula
in B13 is=PMT($B$2/12,A13,-$B$1)FIGURE 15.4Column B shows the payment required to pay off the credit card balance for various payoff periods.