Page 33 - LEARNER GUIDE FNSACC313

Perform Financial Calculations

Month 8 $218.53
Month 9 $218.53
Month 10 $218.53
Month 11 $218.53
Month 12 $222.94
Total of repayments $2622.33

Calculating interest is very complicated when done without the assistance of a calculator or a
spreadsheet. In the Excel spreadsheet product, the function for determining the total amount
to be repaid on a compounding interest loan is IPMT. Go to Excel (or your chosen
spreadsheet software), and try the above calculation using the IPMT function.

There are a number of good websites available for calculating simple and compound interest.
It may be helpful for you to check your calculations on one or more of these websites to be
sure you have made the calculations correctly. Some sites include: The Calculator Site:
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php​ ; and
Financial Mentor: ​https://financialmentor.com/calculator/compound-interest-calculator​ .

NOW IT'S YOUR TURN.
Use a spreadsheet product to determine the interest to be paid on the following transactions:

$15000 borrowed at 6% simple interest over 2 years. ​Check

$27500 borrowed at 10% compound interest over 3 years. ​Check

$555000 invested at4% compound interest over 10 years. ​Check

$115000 invested at 8% simple interest over 5 years. ​Check
Check your answers using one of the online calculators if they differ to the answers here.

PRACTICAL APPLICATION

Now turn to the Practical Applications and complete the two sets of practical applications for
loans and investment calculations.

Anne Bowden ©2020